How Low Can Stocks & Crypto Go? May 19th, 2025 - Driven By Braman Motorcars
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 three indexes are faring in 2025 so far:
- DOW: +1% (+1% last week)
- S&P 500: +2% (+3% last week)
- Nasdaq: ->1% (+3% week)
The market rally extended last week with all indexes meaningfully higher following President Trump’s trade deal with China which reduced tariffs charged by both nations by 115% over a 90-day window while a permanent trade deal is achieved. But as we came to see that was only the tip of the iceberg.
President Trump’s week delivered unprecedented levels of success in the middle east as deals totaling over $2 trillion of investment, with the potential to add 2-3 million jobs in coming years, were finalized.
The market’s historical run over the past month hasn’t only recovered all the losses, in what appears to have been the shortest bear market for stocks in American history, stocks are now higher on the year as well. Earnings were terrific for the recently completed earnings season, providing the market with a solid underpinning of support as headlines and potential tariff impacts are understood within the consumer economy in coming weeks.
As for cryptos...
The bitcoin rally took a pause after crossing the $100k mark once again the previous week. Basing above $100k can be viewed as a potential positive if it holds that level even if there aren’t additional gains over the near term. We’ve continued to see dichotomy with bitcoins significantly outperforming secondary tokens. While bitcoin was only slightly lower recently, Ether was off about 7% last week while the Bitwise 10 ETF, that represents the top ten cryptos was off about 1%.
Here’s a look at where they stand.
- Bitcoin: flat last week +10% YTD
- Ether: -7% last week -25% YTD
- BitwiseETF (Top 10 cryptos): -1%, -4% 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: 28.39
- Historic Avg. P/E: 16.14
Translation: On earnings alone, the maximum downside risk is 45% drop from here—5% more than last week as stock prices improved while fundamentals were slightly weaker over the past week. The market is still slightly historically expensive; however, we have seen an 3% improvement in the fundamental value of the market during this market cycle
So, What’s Your Move?
If a 45% 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.