Storm Warning for 2025: Why the Market Might Face a Repeat of the Financial Crisis

The market is sending ominous signals. Although Bitcoin(BTC) is currently trading around $91,270 and Ethereum(ETH) hovers near $3,130, this superficial stability may only be the calm before the storm. Analysts point out that the accumulating problems in the global economy are eerily similar to the environment before the 2008 financial crisis.

Debt Dilemma: The US Facing a $7 Trillion “Ticking Time Bomb”

The US government needs to refinance up to $7 trillion in debt within the next six months. The current high-interest rate environment significantly increases this cost. This creates a concerning dynamic: the government may be inclined to push markets down to boost bond prices and thus lower interest burdens. This policy logic is strikingly similar to that before 2008.

Divergence Between Policy Direction and Market Expectations

The Trump administration adopted aggressive economic policies, including a 34% tariff on Chinese goods, a 25% tariff on Korean products, and even a 46% tariff on Vietnamese goods. These measures appear to be trade protectionism on the surface but actually serve as catalysts for inflation. Rising import costs will weaken consumer purchasing power and cause confusion in the Federal Reserve’s policy direction—precisely the soil where financial crises are nurtured.

The Bond Market Is the Real Battleground

The core mechanism of this potential crisis lies in the logic of the bond market. To push bond prices higher (and yields lower), capital must withdraw from the stock market. This means the stock market will bear the brunt of the pressure first, while most retail investors remain immersed in market optimism and are unprepared for this shift.

The Invisible Liquidity Crisis

Although it appears calm on the surface, deep liquidity in the market is quietly receding. Trading volumes are declining, buy orders are disappearing, and only a fragile shell remains. This phenomenon also occurred on the eve of Lehman Brothers’ collapse in 2008. When the trigger point arrives, a chain reaction will unfold rapidly.

Hidden Risks in the Banking System

Financial institutions appear “safe” on the surface, but their derivatives exposure remains alarmingly high. Many banks still hold high-risk debt products, just under new names. Trends of credit tightening and rising default rates are already evident. History is repeating itself.

Backlash in the Global Trade System

US tariffs will provoke retaliatory measures from trading partners. Export restrictions mean corporate profits are squeezed, and supply chains are paralyzed. This is the starting point of a global market spiral downward, and this process has already begun silently.

The Dual Nature of Crypto Assets

In theory, cryptocurrencies should benefit from economic chaos. But during the initial market collapse, all assets tend to fall simultaneously. Institutional investors will sell off BTC and ETH to cover losses, and altcoins(Alts) will suffer the most—possibly experiencing 90% declines. Only in the later stages of the crisis might the crypto market recover from the ruins, similar to the post-2020 situation.

The Fed Is Trapped in an Unresolvable Deadlock

The Federal Reserve faces a dilemma: raising interest rates will suffocate the economy, while lowering rates will reignite inflation. This is a classic lose-lose situation. When the market truly crashes, the Fed’s policy tools will become essentially ineffective—they will have no bullets left.

The “Refusal to Believe” Trap for Retail Investors

Retail investors remain in a frenzy, blindly following optimistic expectations while ignoring macro risks. Since Trump took office, the market has already fallen 30%, which is a classic sign of a large-scale collapse approaching. We may see declines exceeding 50%, similar to what happened in 2008.

Political Cycles and Economic Manipulation

Some analysts believe that by controlling the economic cycle, those in power can achieve “recovery” before midterm or presidential elections, shaping favorable political narratives. A planned market reset can clear debt issues and pave the way for the subsequent “savior” image.

When the Crisis of 2025 Truly Arrives

If this storm develops as expected, it will be a premeditated financial reboot. For investors still in the game, hedging risks has become a top priority. Holders of crypto assets should prepare to increase their stablecoin exposure. Those who listened to advice three months ago and moved into stablecoins early may now feel fortunate. The crisis in 2025 could reshape the entire market landscape.