Bitcoin coin beside a falling red price chart, illustrating a crypto market slowdown and weakening investor sentiment in 2025.
Bitcoin and other major cryptocurrencies continue to lag other asset classes and indices as 2025 comes to a close.
Despite a friendly administration and investor risk-on behavior, cryptocurrency markets have been stymied by a lack of clear regulation from U.S. lawmakers.
Crypto-linked stocks like SharpLink Gaming and TeraWulf face valuation and debt risks as digital asset momentum fades.
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The northeast United States wasn’t the only region gripped by bitter cold this month—a new winter has also hit the cryptocurrency market. Weak sentiment and choppy trading threaten Bitcoin with its worst yearly performance since 2022. What’s caused the cryptocurrency stallout in 2025, and can investors hope for a brighter year in 2026?
Below, we’ll explore why digital assets have floundered in 2025, and name two crypto-related companies you might want to stay clear of until Bitcoin reverses its momentum.
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Cryptocurrencies entered the year with plenty of momentum, but the strong bullish sentiment waned as Bitcoin’s price wobbled. Following the 2024 U.S. Presidential election, Bitcoin soared from $70,000 per token to over $120,000 amid anticipation of a friendlier regulatory environment and increased investor risk-taking. We’ve seen more risk-taking from investors (look at all the dips that were bought this year!), but the friendlier regulatory environment hasn’t materialized in the way Bitcoin bulls hoped.
The Trump administration eased some rules on cryptocurrency trading, but the main regulatory focus remains uncertain. The U.S. House of Representatives passed the Clarity Act last summer to establish clearer rules for digital assets. However, the bill is unlikely to make it through the Senate as currently conceived, and draft revisions are underway on both sides of the aisle. The Senate is hopeful for a vote in 2026, but no firm date is scheduled.
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U.S regulators are the only concerns of the crypto market. While the current government is more open to digital assets than previous administrations, the same can’t be said for other world leaders. The European Union tightened oversight of crypto exchanges and stablecoins, as did some Asian regulators.
Stock chart displaying BTC falling, even as GLD, SLV, QQQ, and other assets surge.
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And of course, cryptocurrency mining and trading remain completely banned in China. Cryptocurrency was becoming a proxy to the broader tech sector, moving in lockstep with risk-on assets like AI stocks. However, the chart above shows that the correlation has broken down, and Bitcoin is now underperforming not just stocks but also commodities and bonds.
With the launch of Bitcoin and Ethereum ETFs, investors now have easy access to major cryptocurrencies through traditional channels. As a result, stocks once valued for their crypto exposure—like miners and treasury-heavy companies—are losing investor interest.
Two stocks stand out as especially vulnerable in the current environment. Both have significant crypto exposure, and their recent moves suggest growing financial and technical risks.
SharpLink Gaming Inc. (NASDAQ: SBET) made plenty of headlines earlier this year when the small gaming and advertising company made a full-fledged pivot to crypto.
After hiring Ethereum co-founder Joseph Lubin to the C-suite, SBET doubled down by converting the company into an Ethereum treasury, buying more than $3 billion in ETH tokens and staking nearly all of them to earn yield.
The resulting yield has brought in record revenue, but the company’s future is now entirely tied to Ethereum’s price.
If regulators deem ETH tokens a security next year, SharpLink may be forced to register as an investment company, triggering significant compliance costs and business model shifts.
SBET stock chart displaying an intensifying downtrend.
The stock is also facing pressure from valuation and technical headwinds. Despite record revenue, the company still lost 63 cents per share in Q3 2025, and the stock is still heavily overvalued despite the recent decline. The Moving Average Convergence Divergence (MACD) indicator just formed a bearish crossover, hinting that another burst of downward momentum could hit the stock soon.
TeraWulf Inc. (NASDAQ: WULF) has a noble goal: to become the first carbon-neutral cryptocurrency miner. One of its facilities, Project Nautilis, runs entirely on hydroelectric power out of New York.
TeraWulf also offers high-performance computing (HPC) solutions to data centers, and this combination of revenue sources has led WULF shares to a 120% year-to-date (YTD) performance.
But the company’s rapid expansion was mostly debt-fueled, and now, debt issues are surfacing.
TeraWulf had about $5 billion in debt financing agreements on the books in 2025, with total debt now exceeding $1.5 billion. Analysts warn that this debt load could become unmanageable as costs rise and liabilities grow even closer to matching the company’s assets.
WULF stock chart displaying loss of support at the 50-day SMA, with the stock trending downward.
The fundamental weakness has boiled over into the chart, and now technical headwinds threaten to bring the stock down from its lofty perch. A key support area at the 50-day simple moving average (SMA) has been broken, and this breakdown was confirmed with a bearish crossover on the MACD. While TeraWulf isn’t solely reliant on Bitcoin for income anymore, a further decline in BTC could put serious pressure on the company’s growing debt woes.
The article “2 Stocks to Avoid as Crypto Momentum Wanes” was originally published by MarketBeat.
