Crypto Stocks in Freefall: Why the Smart Money Is Still Waiting on the Sidelines in 2025

Crypto's bloodbath continues—but where are the whales?

Market jitters hit digital asset stocks hard this week, with no lifeline from institutional buyers. While retail traders panic-sell, the so-called 'smart money' watches from a safe distance. Here's why.

The great crypto disconnect

Publicly traded crypto firms are getting hammered despite Bitcoin holding above key support levels. Coinbase shares down 18% this month. MicroStrategy bleeding red. Even mining stocks—usually resilient—are getting crushed.

Three reasons institutions aren't diving in

1. Regulatory purgatory: The SEC's war on crypto exchanges creates paralysis
2. Liquidity traps: Too many exit doors, not enough buyers
3. That old Wall Street trick—waiting for weaker hands to fold first

Meanwhile, crypto bros keep repeating 'buy the dip' like it's 2021. Newsflash: This ain't your bull market granddaddy's correction.

The bottom line

Until we see real volume from pension funds and hedge funds—not just degenerate traders and Twitter gurus—this remains a speculator's game. The smart money? They'll buy when CNBC starts crying 'crypto is dead' again. Probably next Tuesday.

(Bonus jab: Meanwhile, traditional finance guys are still trying to short Bitcoin with their 401(k)s.)

Crypto stocks were once the stars of the market. But right now, they’re not shining so bright. After months of excitement, many of these stocks such as Coinbase, Circle, Metaplanet, have dropped sharply as much as 30% to 50%. 

And the real question is: why aren’t smart investors buying the dip?

Warning That Played Out

According to a detailed report by 10x Research, the current drop in crypto stocks is not just a quick pullback. It reflects a deeper change in how investors are thinking about the true value of these companies.

Stocks connected to the crypto world, like Coinbase, Circle, Kakaopay, and Metaplanet, were rising fast not long ago. Many investors who bought these stocks at their peak are now stuck with heavy losses. 

• Metaplanet has dropped 38%
• Kakaopay is down 28%
• Circle has slipped 21%

Because of this, they’re being more careful and aren’t jumping back in right away.

This cool-off is more than just a short-term pause, it’s a shift in how people are valuing crypto companies. Prices went up too fast, and now the market seems to be correcting those overly high expectations.

Valuations Still Look High

On the other hand 10x research noted that, one big reason smart money is staying away is the Valuations are still very high. Even after the recent drops, many of these crypto stocks still look expensive. For example, Circle is trading at a forward price-to-earnings (P/E) ratio of 153x. 

That means investors are paying 153 times what the company is expected to earn in the future

For Coinbase, the number is 102x, and for Robinhood, it’s 69x. These are high numbers compared to many other sectors in the market. 

Moment to Wait and Watch

Meanwhiel, this doesn’t mean crypto stocks are finished. So even though prices have come down, many investors think they could still fall more before becoming a good buy. 

But right now, smart money is staying patient.