Why did Bitcoin crash and decouple from the U.S. stock market? Major miners shifting to AI, U.S. and Canada crypto regulations stalled…

Bitcoin met resistance around $78,000 on Thursday and then fell below the $75,000 level, officially breaking its strong correlation with traditional stock markets. At the same time, stalled U.S. crypto legislation and a wave of miners dumping BTC—shifting toward AI infrastructure—have intensified sell pressure.
(Background: Bitcoin dumped to $74,243, hitting a 14-day low. The crypto market saw liquidations of “$438 million,” with 100,000 traders getting wiped out and casualties on multiple fronts.)
(Background addition: Building a $3 trillion super “giant”? Rumors say Elon Musk intends to merge Tesla and SpaceX; if successful, the new entity would hold 30,000 BTC.)

Table of Contents

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• Miner sell-offs and the dual pressure of AI transition
• Politically related sell-offs intensify market panic
• U.S. crypto legislation progress stalls
• The Federal Reserve balance sheet stalls, and liquidity expectations miss the mark
• Capital flows into AI infrastructure

After Bitcoin met resistance and weakened on Thursday near $78,000, it continued to slide; on Wednesday it even broke below the $75,000 level. The most striking thing about this drop is the fundamental change in Bitcoin’s relationship with traditional markets. In contrast to the past two months when BTC closely tracked the performance of U.S. stocks, this time BTC chose to fall independently on the same day that the Nasdaq 100 index hit an all-time high.

Miner sell-offs and the dual pressure of AI transition

One of the core reasons behind BTC’s weakness comes from miners’ large-scale sell-offs and the industry’s transition. Multiple publicly listed bitcoin mining companies have recently been selling their BTC reserves and redirecting funds to AI infrastructure development.

TeraWulf (WULF) is one of the most representative cases. The company announced it will add 1 gigawatt of high-performance computing (HPC) capacity in Kentucky, effectively transforming traditional mining facilities into AI data centers. This means that the BTC accumulated by miners may be rapidly liquidated to fund capital expenditures for AI hardware.

This trend showed early signs in 2025. A VanEck report notes that if bitcoin mining companies partially shift toward AI and high-performance computing by 2027, they could earn about $13.9 billion in additional revenue each year. AI companies need energy, and bitcoin miners precisely have the most extensive energy footprint—this “miner defection” wave directly adds pressure to BTC’s supply side.

Politically related sell-offs intensify market panic

Lookonchain data shows that on Friday, Trump Media & Technology Group (DJT) transferred 2,650 BTC (about $205 million) from cold wallets to crypto exchanges. This media group is controlled by former President Trump’s family. Previously, it had accumulated 11,542 BTC at an average price of more than $11,850 per coin.

The large-scale cash-out by politically connected entities cannot be underestimated in terms of its impact on market sentiment. Investors will question whether these BTC come from exchange deposits or are sold directly on-chain—both scenarios can create real sell pressure in the short term.

U.S. crypto legislation progress stalls

The slow progress of two key cryptocurrency bills in the U.S. Congress further undermines market expectations that policy benefits are coming soon:

The Digital Asset PARITY Act is designed to reform crypto taxation and exempt the tax burden on miners and Staking rewards before they are sold. The proposal was formally submitted in May, but it has not yet been placed on the agenda for hearings or votes.

The Digital Asset Market CLARITY Act, meanwhile, awaits a full vote in the Senate and currently has no scheduled date. The bill would split regulatory authority over digital assets between the CFTC (Commodity Futures Trading Commission) and the SEC (Securities and Exchange Commission), while also complementing the already passed GENIUS Act (the stablecoin comprehensive law).

Legislative stagnation means the U.S. crypto market remains in a prolonged state of uncertainty regarding “regulatory certainty,” making it difficult for investors to incorporate policy benefits into valuation models.

The Federal Reserve balance sheet stalls, and liquidity expectations miss the mark

Markets previously expected the Federal Reserve to continue expanding its balance sheet by injecting liquidity through purchases of U.S. Treasuries. However, since April 15, the Fed’s total asset size has remained flat at $6.7 trillion, and the pace of expansion has clearly slowed.

Rising oil prices have boosted inflation expectations, leading the Fed to adopt a more cautious stance in monetary policy. If expansionary measures push oil prices and inflation upward too quickly, they could end up backfiring on economic growth. This also means market expectations for a “liquidity premium” are being readjusted.

Capital flows into AI infrastructure

Bitcoin’s weakness stands in sharp contrast to the surge in AI infrastructure sector stocks. Memory chip leaders SK Hynix and Micron have both, for the first time, surpassed a market capitalization of $1 trillion, and multiple stocks have climbed by more than 20% within a single week.

This capital diversion effect shows that investors are shifting their bets from “digital gold” to “AI hard currency.” When tech giants’ earnings reports continue to come in above expectations, funds naturally flow from relatively static BTC into AI supply chains that have tangible growth in output.