How Low Can Stocks & Crypto Go? April 7th, 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.
Let’s dive into the carnage—here’s how the big dogs are faring in 2025 so far:
- DOW: -10% (-7% last week)
- S&P 500: -14% (-8% last week)
- Nasdaq: -19% (-8% last week)
Last week I said this: Wednesday will be the key day to know what’s, what with a new slew of reciprocal tariffs President Trump is set to implement. It figures to be another volatile week for stocks. Well...that most certainly proved true.
Stocks had already fallen for four out of five weeks preceding the bloodletting that took place after his announced reciprocal tariff policies last week. Few are the events that have led to a two-day 10% selloff in the S&P 500, the most recent preceding President Trump’s “Freedom Day” policy rollout occurred at the onset of the worldwide outbreak of the pandemic just over five years ago, but that’s exactly what we saw to close out last week. And that’s perhaps an important yardstick to consider as investors digest what’s happened here as all major indexes are in correction territory and the Nasdaq and Russell 2000 are in bear market territory (a decline of 20% or more).
Even after the most recent selling consider that the S&P 500 is 85% higher than it was during the peak of the selling during the pandemic. History tells us that these types of events are long-term buying opportunities – not times to panic.
On the data front, the market received an especially strong jobs report on Friday with job growth far stronger than expectations and an improved labor force participation rate. The question is whether it will last as this major reset in trade policy takes shape. Federal Reserve Chairman Jerome Powell said it’s too early for the Fed to take policy action to respond to the tariff policy.
As for cryptos...
Digital coins were a standout story 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 safe 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 look at where they stand.
- Bitcoin: -3% last week, -13% YTD
- Ether: -7% last week -47% YTD (ouch)
- BitwiseETF (Top 10 cryptos): -1% last week, -23% 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: 25.19
- Historic Avg. P/E: 16.14
Translation: On earnings alone, the maximum downside risk is 36% drop from here—indicating 6% less risk than a week ago as stock prices fell significantly faster than fundamentals over the past week. The market is still slightly historically expensive; however, we have seen a 12% improvement in the fundamental value of the market during this correction cycle.
So, What’s Your Move?
If a 36% 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.