Episode summary
What if the Stock Market Falls 30%?
Ask The Compound
· · Hosts: Ben Carlson, Duncan Hill · Guests: Eric Balchunas
Summary
The hosts and Eric Balchunas argue that for most investors, a Bitcoin ETF is the simpler and often cheaper way to get Bitcoin exposure than buying the coin directly. Balchunas says brokerage trading is typically commission-free with tight spreads, while spot crypto purchases can still carry roughly 1.4% costs and more operational hassle. He also notes that ETFs add peace of mind because the fund companies handle custody, cold storage, and security issues that individual holders must manage themselves.
On the market side, the discussion says crypto is not big enough to cause a stock market crash. Balchunas and the hosts frame Bitcoin more as a risk-sentiment indicator that often trades like nonprofitable tech, not as the driver of equity weakness. They also reject the idea that cheap gas prices automatically signal recession, pointing to long stretches in the 1980s, 1990s, and today when low fuel prices coincided with healthy growth.
For the stock-market drop question, they argue a 20% to 30% decline would not be unprecedented after several strong years and could simply reset prices to levels seen in January 2024. On retirement planning, the hosts tell a high earner with a $3 million hodgepodge of assets that the right move is to work with a wealth manager and turn that mix into a real plan, including tax, estate, and risk management.
Key takeaways
- Eric Balchunas says a Bitcoin ETF usually beats buying Bitcoin directly on Coinbase on ease, spreads, and custody for most investors.
- Balchunas says direct Bitcoin ownership can be cheaper only if an investor trades once and holds for four or five years.
- The hosts say crypto is not large enough to trigger a stock market crash; it is more a gauge of risk appetite than the cause.
- Ben Carlson says low gas prices do not by themselves mean recession, because cheap fuel has also coincided with strong economies.
- The hosts say a 20% to 30% market drop would mostly take stocks back to roughly January 2024 levels, not some distant past.
- The hosts tell a high earner with $3 million that the goal should be a formal retirement plan, not more DIY guesswork.
Notable quotes
“if you buy it on a brokerage account, there's no trading commission”
“I think you have to hold it for four or five years because then that that because that 1.4% is a onetime cost”
“crypto is not going to cause a stock market crash. Crypto is just a risk on riskoff asset”
“A 30% decline from current levels would take us back to January 2024”
“Most financial advice in the wealth management industry is explicitly geared towards people like you who have millions of dollars”
How the episode opens
Welcome to our final Ask the Compound episode of 2025. This is a show where you, the audience, ask the questions and we provide the answers. The US stock market was up 24% last year.
This year, it's up nearly 20%. And that's on top of a 26% gain in 2023. So, would it be that surprising if the stock market fell, say, 20% in 2026?
What about 30%. What would that mean? What should you do if this happens?
How can you prepare? We're going to cover that scenario on today's show and more. Let's do this.
Our email here is ask the compound show@gmail.com. Send us in an email if you have a question. Leave us a comment in a live chat.
Dave in the comments last week complained that we did not bring it with holiday sweaters. So today we brought it Duncan. We're wearing our holiday best Thunder myth one.
That's pretty good. I like it. On today's show, we're answering questions straight from the viewers about should you buy the Bitcoin ETF versus buying it on an exchange?
Can crypto cause the stock market to fall? Are low gas prices signaling a recession? How can you prepare for a stock market crash?
And then how do you turn the page on a hodgepodge of investments and make it into an actual retirement plan? But first, today's show is brought to you by Rocket Money. Ever feel like your money just disappears every month?
It's easier never to overspend, especially around the holidays. You have subscriptions piling up, impulse buys. Rocket Money helps you rein it in by showing you where your money is going, helping you make better decisions so you can keep more money in your pocket.
Rocket Money is a personal finance app that helps you find and cancel unwanted subscriptions, monitors your spending, and helps you lower your bills so you can grow your savings.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- bitcoin etf vs bitcoin
- crypto crashes
- stock market declines
- gas prices recession signal
- tax-advantaged retirement savings
Watch the episode
Watch “What if the Stock Market Falls 30%?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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