How Low Can Stocks & Crypto Go? March 31st, 2025
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—it’s a 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 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.
Let’s dive into the carnage—here’s how the big dogs are faring in 2025 so far:
- DOW: -2% (-2% last week)
- S&P 500: -5% (-3% last week)
- Nasdaq: -10% (-4% last week)
Stocks fell for the 4th week out of five last week as the Nasdaq reentered correction territory (a decline of 10% or more) with stocks positioned to wrap up the worst month since December of 2022. The price action is explained in three ways. 1) Renewed concerns regarding inflation 2) Tariffs 3) The market has been historically expensive on a fundamental basis.
On the data front, the market received hotter than expected inflation news on Friday that helped drive the market’s brutal day as the personal consumer expenditures report showed the cost of life reaccelerating a bit most recently contradicting the better-than-expected inflation news earlier in the month, and that’s prior to the impact of increased tariffs which are set to hit this week. So about that...
Wednesday will be the key day to know what’s, what with a new slew of reciprocal tariffs President Trump is set to implement. The one that’s being most closely watched is the announced 25% tariff on all automobiles that aren’t manufactured in the US. Almost all cars are set to be impacted to at least some degree as even US manufactured autos include foreign parts that may be subject to the new tariff.
It figures to be another volatile week for stocks.
As for cryptos...
Digital coins were generally lower for the ninth week out of ten. While bitcoin’s price has stabilized, the second and lesser tiered tokens have continued to take it on the chin. As for the price action...
- Bitcoin: flat last week, -12% YTD
- Ether: -5% last week -45% YTD (ouch)
- BitwiseETF (Top 10 cryptos): Flat last week, -20% 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: 27.80
- Historic Avg. P/E: 16.14
Translation: On earnings alone, the maximum downside risk is 42% drop from here—indicating 1% less risk than a week ago as stock prices fell slightly faster than fundamentals. The market is still historically expensive; however, we have seen a 6% improvement in the fundamental value of the market during this correction cycle.
So, What’s Your Move?
If a 42% 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.