How Low Can Stocks & Crypto Go? October 6th, 2025
The partial government shutdown 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: +10% (+1% last week)
- S&P 500: +14% (+1% last week)
- Nasdaq: +18% (+1% last week)
Somewhat remarkably the stock market continued to climb the wall of worry last week despite headwinds from seasonality, somewhat historically high valuations and notably the partial government shutdown which had carried into this week. Also shrugged off during the week was the ADP private sector jobs report, the only jobs report released last week as the BLS’s report wasn’t released on Friday due to the government shutdown. The report showed negative job growth amid what had already been sluggish growth in recent months. Still, investors continue to price in optimism around the impact of AI for corporate America. Also, the partial shutdown increases the likelihood for the Federal Reserve to continue to cut interest rates going forward. Investors have now priced a 96% chance of an additional rate cut in the market this month, up from 88% a week ago.
The partial government shutdown will be front-and-center this week. Also, Federal Reserve Chairman Jerome Powell is set to speak on Thursday. That will gain lots of attention as well. It figures to be a volatile week for the financial markets.
As for cryptos...
Here’s a look at where they stand.
- Bitcoin: +8%, +30% YTD
- Ether: +9% last week, +35% YTD
- BitwiseETF (Top 10 cryptos): +9%, last week +34% 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: 31.11
- Historic Avg. P/E: 16.18
Translation: On earnings alone, the maximum downside risk is a 48% drop from here—slightly higher than last week as prices rose faster than fundamentals. The market is historically expensive as it’s priced near 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.