Market Crash Risk Jumps to 35% as Bitcoin (BTC) Holds Steady Above $67K

TLDR

• Market strategist Ed Yardeni has increased the likelihood of a U.S. equity market crash from 20% to 35%
• Crude oil surpassing $100 per barrel is intensifying inflation concerns and dampening growth forecasts
• Bitcoin maintains a position near $67,000, showing more resilience than declining international stock markets
• Research from NYDIG indicates just 25% of Bitcoin’s price action correlates with traditional equity movements
• Leadership transition in Iran following recent conflicts points to ongoing geopolitical instability and market volatility

Prominent Wall Street analyst Ed Yardeni has significantly increased his forecast for a U.S. stock market crash, now placing the probability at 35% through the remainder of 2025. This marks a substantial jump from his previous 20% estimate. Simultaneously, he slashed the likelihood of a sustained market rally down to a mere 5%, compared to the earlier 20% projection.

This revised outlook emerges as crude oil prices have breached the $100 per barrel threshold. Elevated energy prices create a dual threat: they fan inflationary pressures while simultaneously constraining economic expansion, creating headwinds for both equity and cryptocurrency markets.

Yardeni characterized the situation bluntly: “The U.S. economy and stock market are stuck between Iran and a hard place. So is the Fed.”

Tensions between the U.S. and Iran show no signs of abating. Following Iran’s refusal to de-escalate, President Trump has indicated additional military action may be forthcoming. The Islamic Republic has also designated a new supreme leader, Mojtaba Khamenei, following the death of his father Ali Khamenei in a U.S. military operation. Senior Iranian security officials have declared that Trump “must pay the price” for the ongoing hostilities.

Bitcoin was changing hands near $67,378 during Monday trading sessions, registering a modest gain of slightly above 1% over the preceding 24-hour period. This represents relatively modest volatility when measured against the turmoil gripping conventional financial markets.

Bitcoin (BTC) Price

S&P 500 futures contracts plunged over 2% during Asian market hours. The VIX volatility index, commonly referred to as Wall Street’s fear gauge, reached levels not witnessed since the tariff-induced market disruption of April 2024. Meanwhile, the U.S. dollar recorded its strongest weekly performance in twelve months.

International markets experienced severe selling pressure. The MSCI global equity benchmark declined 3.7% during the previous week. South Korean markets continue struggling to recover from an unprecedented two-session collapse. Hedge fund managers have substantially increased bearish wagers against U.S. equity ETFs.

Market participants have also adjusted their Federal Reserve rate cut expectations, now anticipating the next reduction in September. Prior to the escalation of Middle East tensions in late February, traders had completely priced in a rate cut by July.

Bitcoin’s Price Is Not Fully Tied to Stocks

Analysis conducted by NYDIG reveals that approximately 25% of Bitcoin’s price fluctuations can be attributed to correlation with U.S. equity markets. The remaining 75% stems from dynamics unique to the digital asset ecosystem.

Greg Cipolaro, NYDIG’s head of research, explained that Bitcoin’s recent parallel movement with software sector stocks reflects common vulnerability to prevailing economic conditions rather than indicating a fundamental connection.

Nevertheless, Bitcoin has declined in tandem with equities during each significant risk-aversion episode since 2020.

Crypto-Linked Stocks Also Feel the Pressure

Equity securities with cryptocurrency exposure have experienced heightened volatility as investor sentiment turns increasingly defensive. Bitcoin mining operation Core Scientific liquidated a portion of its Bitcoin reserves while transitioning toward an artificial intelligence-oriented business model. The company’s shares declined around the timing of this divestment.

Ether posted a 2.3% gain, reaching approximately $1,981. Solana advanced 1.8% to $83.69, though it continues to underperform other major cryptocurrencies on a weekly basis, still showing a 1.5% decline over the seven-day timeframe.

Ten-year Treasury note yields surged six basis points as bond markets incorporated expectations for elevated inflation stemming from higher petroleum costs.

The S&P 500 recorded a 2% weekly decline, experiencing less severe losses than most international indices, partially attributable to America’s substantial domestic energy production capabilities.