How Low Can Stocks & Crypto Go? August 18th, 2025
Tariffs, Jobs, earnings and inflation are in focus
Bottom Line: My first rule of money... Never let your money and emotions cross paths. This story is a weekly wake-up call to show you the near-worst-case scenario for stocks and crypto. Why? So, you can plan your financial future with a cool head, not a racing pulse. The odds of a near-worst case outcome almost certainly won’t happen, however if your plan accounts for it – it can help you manage through even the most trying markets like what we’ve experienced this year.
The US stock market is history’s ultimate wealth-building beast. Crypto? It’s minted millionaires from early believers. Fact: Over 90% of the time, investors who try to “time” the market end up poorer than if they just stuck to their original investments. This is about dodging that trap.
Here’s how the big three indexes are faring in 2025 so far:
- DOW: +6% (+2% last week)
- S&P 500: +10% (+1% last week)
- Nasdaq: +12% (+1% last week)
It was another week of record highs for stocks as the S&P 500 and Nasdaq have now produced double-digit gains year-to-date for investors. The AI boom, a resilient economy, strong earnings and expectations for the Federal Reserve to begin cutting interest rates next month have contributed to continued gains.
Over the next week geopolitical news could also factor into the equation. Any indication of peace between Russia and Ukraine would provide an additional positive catalyst for the markets. In what’s likely to be a headline driven week – housing will be in focus with a slew of housing data that begins to roll in on Tuesday, details of the Federal Reserve's recent policy meeting on Wednesday, and manufacturing data on Thursday.
As for cryptos...
Here’s a look at where they stand.
- Bitcoin: flat last week +25% YTD
- Ether: +10% last week +35% YTD
- BitwiseETF (Top 10 cryptos): +6%, last week +24% YTD
I can’t value cryptos because they have no inherent value. Stocks, though? They’ve got bones. Let’s break down the S&P 500:
- Current P/E: 29.88
- Historic Avg. P/E: 16.16
Translation: On earnings alone, the maximum downside risk is a 46% drop from here—a little more risk than last week as stock prices improved faster than fundamentals. The market is still somewhat historically expensive; we have seen a 2% improvement in the fundamental value of the market during this market cycle.
So, What’s Your Move?
If a 46% dip wouldn’t derail your life, you’re probably golden. If it would? Time to call a pro and build a plan that doesn’t leave you sweating bullets—or making mistakes.