How Low Can Stocks & Crypto Go? August 11th, 2025
Tariffs, Jobs, earnings and inflation are 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: +4% (+1% last week)
- S&P 500: +9% (+2% last week)
- Nasdaq: +11% (+3% last week)
Stocks bounced back significantly, led by technology last week as the Nasdaq closed at a new record high to end the week. Apple had it’s best week in over five years following CEO Tim Cook’s Oval Office visit with President Trump and confirmation of $600 billion in total U.S. maufacturing investments over the next four years. The rally also came despite Thursday’s “Liberation Day” 2.0 tariffs taking effect which dramatically increased imposed tariff rates on a host of countries without new trade deals in place with the United States. As for earnings...
With 90% of companies having reported, earnings growth has paced 11.8% year-over-year, which is well ahead of what had been expected. This dynamic helped the market continue to reach a series of record highs despite tariff and interest rate concerns.
As for cryptos...
The risk off, selloff hit cryptos last week as well, with an across-the-board decline in the digital currency space.
Here’s a look at where they stand.
- Bitcoin:+4% last week +25% YTD
- Ether: +21% last week +25% YTD
- BitwiseETF (Top 10 cryptos): +5%, last week +18% 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: 29.58
- Historic Avg. P/E: 16.16
Translation: On earnings alone, the maximum downside risk is a 45% drop from here—a little less than last week as fundementals improved faster than stock prices. The market is still somewhat historically expensive; we have seen a 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.