How Low Can Stocks & Crypto Go? April14th, 2025 - Driven By Braman Motorcars
Buckle Up: The Markets Are Testing Your Nerves—Here’s What You Need to Know
Bottom Line: My first rule of money... Never let your money and emotions cross paths. This isn’t a doomscroll though after the past week you might feel that you’re living through one. 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’re experiencing right now.
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’d just stuck to their original investments. This is about dodging that trap.
Here’s how the big dogs are faring in 2025 so far:
- DOW: -5% (+9% last week)
- S&P 500: -9% (+10% last week)
- Nasdaq: -13% (+12% last week)
Last Monday I said this: History tells us that these types of events are long-term buying opportunities – not times to panic. If you were buying into the bear market early last week you were likely well rewarded by the end of the week in what proved to be one of the most volatile in American history.
One of my themes for the current cycle has been perspective being key. The cause for this round of bear market activity wasn't underlying weakness in the economy but instead a reset of global trade policy. That naturally lends itself to big swings. Event driven selloffs are much different than macro-economic issues. The key to knowing what comes next is whether the shock to the system in the resetting of trade policy will cause a recession. That remains unclear but is increasingly unlikely as President Trump has continued to modify his stance on trade policy – first the limiting of imposed tariffs to 10% for global imports except for China and second with this weekend’s announcement that most consumer electronics from China were to be exempt from tariffs.
On the data front, the market received a double dose of great news of the inflation front as the rate of both consumer and producer inflation reached four-year lows last month – clearing the way for the Fed to consider lowering interest rates going forward – potentially as soon as in their May policy meeting. Aside from trade policy, earnings season will be in focus this week. Expectations are for earnings to have grown by 7.3% year-over-year.
As for cryptos...
Bitcoin performed well in the mist of massive volatility again last week. While it’s been a rough run for cryptos to start the year, last week’s price action in the mist of extreme volatility may have been a turning point for the space. The argument had long been made, by crypto advocates, that top-tier tokens like bitcoin were essentially “digital gold”. A haven during time of volatility. We’d not seen any evidence of that being the cast until last week. Cryptos performed similarly to gold generally holding up far better than the stock market. Here’s a look at where they stand.
- Bitcoin: +11% last week, -11% YTD
- Ether: +9% last week -52% YTD
- BitwiseETF (Top 10 cryptos): +9% 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: 26.67
- Historic Avg. P/E: 16.14
Translation: On earnings alone, the maximum downside risk is 39% drop from here—indicating 3% more risk than a week ago as stock prices rose significantly faster than fundamentals over the past week. The market is still slightly historically expensive; however, we have seen a 9% improvement in the fundamental value of the market during this correction cycle.
So, What’s Your Move?
If a 39% 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 broke.
The markets don’t care about your feelings. Don’t let them hijack your wallet.