How Low Can Stocks & Crypto Go? September 22nd, 2025
A future Fed rate cut is now 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: +9% (+1% last week)
- S&P 500: +14% (+1% last week)
- Nasdaq: +17% (+2% last week)
It finally happened. The Federal Reserve cut the Fed Funds rate by a quarter of a percent last week for the first time this year. That was of no surprise as a 100% probability a rate cut priced into the market by investors with the only question being by how much. 93% of traders had priced in a quarter-point cut, so the Fed delivered on expectations. Also, importantly, the Fed’s guidance indicated that they planned to cut rates by an additional half of a percent by year end. The market had priced in an 84% chance of a rate cut in the Fed’s October meeting. That’s now up to 92% and that additional optimism on lower rates helped fuel a rally to record highs for both the Dow & S&P 500 on Friday.
It will be interesting to watch the market’s direction from here as we’re in the seasonally worst time of the year for stocks historically without a clear near-term catalyst beyond inflation/rate discussions.
As for cryptos...
Here’s a look at where they stand.
- Bitcoin: flat last week, +23% YTD
- Ether: -4% last week, +34% YTD
- BitwiseETF (Top 10 cryptos): +5%, last week +31% 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: 30.85
- Historic Avg. P/E: 16.17
Translation: On earnings alone, the maximum downside risk is a 48% drop from here—slightly higher than last week as prices advanced faster than fundamentals. The market is historically expensive as it’s now priced at the highest multiple of the current bull market cycle.
So, What’s Your Move?
If a 48% 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.