How Low Can Stocks & Crypto Go? October 13th, 2025
The partial government shutdown and Trump’s Chinese Tariff Polices 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: +7% (-3% last week)
- S&P 500: +12% (-3% last week)
- Nasdaq: +15% (-3% last week)
The financial markets, and stock market in particular, had held up particularly well during the first week and a half of the partial government shutdown. That was not the case on Friday when President Trump’s threat of imposing a new 100% tariff on Chinese imports (above and beyond current tariffs) effective November 1st was announced. At issue, a trade dispute with China over “rare earths”, whereby the President alleges China is not only breaking with their agreed to terms with the United States, but is also issuing mandates and dictates to other countries regarding the exporting of these resources to the United States. Tariff fears had largely been digested by the markets long ago as record highs continued to be achieved throughout the summer and early fall. That ended, if only for a day on Friday, when markets posted their worst single day performance since April’s tariff fears.
This week will be dominated by the concerns we ended last week with. Chinese trade policy and the partial government shutdown as it enters its third week by mid-week with no clear end in sight. President Trump has begun the formal process of reductions in force with the federal government as over 4,200 furloughed federal government employees across at least eight government agencies. Notably this week was to be the week for key monthly inflation data, the consumer and producer price index reports. The Commerce Department is preparing to release that information, though delays in the timing of the reporting are expected.
As for cryptos...
Here’s a look at where they stand.
- Bitcoin: -8%, +19% YTD
- Ether: -14% last week, +14% YTD
- BitwiseETF (Top 10 cryptos): -8%, last week +25% 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: 30.34
- Historic Avg. P/E: 16.18
Translation: On earnings alone, the maximum downside risk is a 47% drop from here—slightly lower than last week as prices fell 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 47% 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.