How Low Can Stocks & Crypto Go? January 21st, 2026
Tariffs, Greenland, Congress and Earnings are in focus entering this week...
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 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 have fared in 2026:
- DOW: +2%
- S&P 500: +1%
- Nasdaq: +1.2%
The past week produced lower prices for stocks while digital currencies rallied a bit and gold and silver once again posted new highs due to one issue that had ramped up by the close of trading on Friday but that has taken on an altogether much more significant vibe heading into this shortened trading week. While President Trump has increasingly ramped up his desire for the U.S. to acquire Greenland from Demark, over the weekend he announced demands that hold the potential to have the greatest market impact since the original “Liberation Day” tariffs were rolled out last April.
President Trump has announced that he intends to raise tariff rates by 10% on February 1st for eight European countries if a deal for the United States to acquire Greenland from Denmark isn’t reached. He further said those tariffs would rise to 25% on June 1st if a deal still hasn’t been reached by then. In response, the EU has held an emergency meeting over the weekend and is considering retaliatory tariffs that could prove to be significant. An actual war over Greenland isn’t going happen, however a trade war just might. The market reaction to uncertainty is likely to be significant.
Otherwise, the economic news has been positive. Inflation came in lighter than expected in last week’s CPI and PPI reporting and earnings season is off to a strong start with earnings, for the 7% of companies that have reported, pacing 8.2% growth year-over-year.
Now for valuation calculations – starting with cryptos...Here’s a look at where they stand.
- Bitcoin: +5% in 2026
- Ether: +7% in 2026
- BitwiseETF (Top 10 cryptos): +6% in 2026
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: 31.34
- Historic Avg. P/E: 16.19
Translation: On earnings alone, the maximum downside risk is a 48% drop from here—slightly lower than a week ago as stock prices fell and fundamentals slightly improved. 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.