2025-12-31 01:24:40

The 2025 US stock market performance can be described as a rising tide, with the S&P 500 frequently hitting new highs, and many investors immersed in the joy of gains. However, behind this wave of growth, there are hidden risk signals that are being overlooked.

Federal Reserve Chair Jerome Powell's recent comment sparked market reflection—"Stock prices are already quite overvalued." This is not just casual talk but a clear warning from the decision-maker steering the global financial system.

Data speaks for itself. The Shiller Price-to-Earnings ratio has now soared to 40.74. How crazy is this number? Compared to the peak of 44.19 during the internet bubble era, we are already quite close. Looking back at historical records, whenever the Shiller P/E exceeds 30, unusual circumstances tend to follow. In the past 155 years, this has happened only 6 times, and in each of the first 5 instances, it ended in a bear market with declines ranging from 20% to 89%.

Will this time be different? It's hard to say. High valuation environments indeed influence policy considerations. While the Fed cannot directly intervene in the stock market, tightening financial conditions often put pressure on overvalued assets. History shows that when the market collectively ignores such warnings, adjustments tend to be sudden.

However, from another perspective, the average bull market cycle is close to 3 years, much longer than bear markets. After each correction, the market is reshaping itself. Even a 20% pullback usually takes just over 9 months to digest.

For crypto asset allocation, this might be an opportune moment for reflection. During periods of macro risks accumulation, considering increased holdings of risk-averse assets like Bitcoin may provide some balance amid market volatility. The key is to understand your risk tolerance—whether you can endure until the next recovery, which determines the effectiveness of your strategy.

Will 2026 become a turning point? The market is already giving clues.

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shadowy_supercoder

· 7h ago

Powell's words sound like a hint at something, but retail investors are still celebrating haha Shiller's PE has soared to over 40, which is really unsustainable. It feels like the next wave of correction is coming At times like this, it's still good to hold some BTC to ease the nerves. Anyway, the idle money can be considered insurance Is this really different this time... What does history say? The first five times all saw declines Those who can't hold on will eventually be out, only those who can withstand the recovery are the winners. It all depends on how long you can persist

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FrogInTheWell

· 7h ago

Schiller PE is almost 44, is this time really different? Anyway, I’ve already stocked up on my Bitcoin. --- Powell’s words sound a bit harsh, is he about to start cutting the leeks again? --- Six times in history it has crashed, can it escape this time? I don’t believe it. --- A 20% decline digested in 9 months sounds pretty comfortable, but the question is whether it can withstand those 9 months. --- Is crypto really the last straw, or was it always meant to be paired with something? --- A three-year bull market and a one-month bear market, how do you solve this math problem? --- Oh my, this valuation is outrageous. Why is everyone still frantically adding positions? --- Starting to tell stories again, it was the same last time. --- 2026 turning point? So what should I do now, wait or go all in? --- I support Bitcoin allocation, at least it’s not completely synchronized with the US stock market.

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BearMarketLightning

· 7h ago

Shiller PE is almost approaching internet bubble levels, and some people are still buying the dip. Truly admirable courage. Powell has already made it clear, yet some pretend not to hear. Get ready to hit the limit down, everyone. If Bitcoin can withstand this wave, then it really demonstrates risk resilience. The high recurrence rate of history is so evident—why do we think this time will be different? Adding more BTC is a good idea, but it depends on how long you can hold out. Bull markets last longer, that's true, but the moment they fall can be quite frightening. Instead of predicting 2026, it's better to think now about where your stop-loss point is. Behind this overvaluation is actually the energy being accumulated for the next adjustment. A 20% correction over 9 months? That’s only if you’re not caught in it, haha. During the macro risk accumulation phase, everyone entering now is gambling with fate.

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BtcDailyResearcher

· 7h ago

Powell said that overestimating is really overestimating, and this time the PE ratio of over 40 times is indeed a bit risky... But on the other hand, in the past five times, the market has all fallen. Why should this time be any different? Instead of worrying about when the correction will come, why not consider adding some BTC now? At least you can sleep peacefully. Wait, a PE ratio of over 40 times... is this even more outrageous than the internet bubble? Is the market really this crazy? There are many who can't wait for the recovery; the key is to know your own bottom line. 2026 is indeed worth watching, but we need to start preparing now. Changing the topic, but it seems that cryptocurrencies are actually the safe haven in this round of risk... A 20% correction only takes 9 months to recover? That means it could happen anytime, maybe even next week. Powell's words are serious, right? He's not hinting at anything, is he? The market has been betting on the next bull run, but who can guarantee that the money will still be worth something... An average bull market lasts 3 years, which means it could end at any time. The idea of crypto asset allocation is good; anyway, the US stock market is also uncertain...

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GasFeeCryer

· 7h ago

The P/E ratio of Shiller is approaching internet bubble levels, and some people are still sleepwalking... Powell openly admits it was overestimated; this time, we really need to have some BTC as a safety net. In 155 years, there have been only 6 instances, with the first 5 being bear markets. The probability... is it making you anxious? It sounds nice, but it's actually betting on surviving until the next recovery... A bull market lasts 3 years, while a bear market lasts only a few months? Sounds like comforting oneself. Instead of catching the knife, it's better to get on the boat early with BTC. Risk hedging really can't wait. High valuation + tightening conditions = a time bomb, it will explode sooner or later.

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