The Debate Over Stock Market Valuations: Is It the “New Normal” or a Potential “Bubble”?
Since early 2025, valuation levels in global stock markets—particularly the U.S. stock market—have been a focal point of market discussion. In January 2025, Bank of America strategist Savita Subramanian noted thatthe S&P 500’s valuations had reached “extreme levels,” with 19 of the 20 valuation metrics she tracked in extreme territory and the trailing price-to-earnings (P/E) ratio at 25.3 times—significantly higher than the 15-times average over the past 125 years.However, Subramanian also suggested that, given changes in the composition of S&P 500 constituents—with companies now carrying lower leverage and higher quality—and the potential for efficiency gains from artificial intelligence (AI) and automation to drive a productivity boom and more stable earnings growth, high valuations might become a “new normal.”At the time, she set a target price of 6,666 points for the S&P 500 in 2025.
As we enter 2026, market optimism regarding U.S. stocks remains strong. Booz, Global Chief Investment Officer of Standard Chartered Bank’s Wealth Solutions, stated in September that U.S. stocks and U.S. tech stocks still have room to rise, driven primarily by robust corporate earnings momentum rather than speculative trading.Analysts at Goldman Sachs and Deutsche Bank also refuted claims of an “earnings bubble,” predicting that while the growth rate of U.S. corporate earnings may slow, it will remain strong.JPMorgan, meanwhile, believes that driven by structural factors such as AI, healthcare, and the service sector, the “breakpoint threshold” at which the stock market can withstand high yields may have risen to between 5.5% and 6%.
Nevertheless, there are also voices of caution in the market.In March 2026, Goldman Sachs warned that if the S&P 500’s forward 12-month price-to-earnings ratio were to plummet from 22 times to 19 times, the market could approach a “growth shock” scenario; should geopolitical tensions escalate, the index could fall a further 15% to 5,400 points.These differing viewpoints collectively paint a complex and uncertain picture of the current stock market.
The Evolving Correlation Between Bitcoin and Traditional Markets
As an emerging asset, Bitcoin’s correlation with traditional financial markets has been constantly evolving.In 2024, the 90-day rolling correlation between Bitcoin and the Nasdaq Index reached as high as 0.87, while the correlation between MicroStrategy stock and Bitcoin was even higher at 0.93. This indicated an exceptionally strong linkage between cryptocurrencies and tech stocks at the time, with Bitcoin largely viewed as a risk asset.
However, by September 2026, Bitcoin’s correlation with gold had risen to a multi-year high, while its correlation with stocks had weakened. This shift may indicate that Bitcoin is transitioning from a “pure risk asset” to a safe-haven asset for monetary and credit risks, reinforcing its “digital gold” narrative.A study of data from 2017 to 2026 also noted that tight monetary policy (interest rate hikes) first affects the bond market, then the stock market (the Nasdaq and S&P 500) about a month later, and finally Bitcoin—though Bitcoin’s declines are typically the most severe.This suggests that Bitcoin may face greater volatility during market downturns.
Bitcoin’s Recent Performance and Market Outlook
As of September 25, 2026, the price of Bitcoin fluctuated between $84,318 and $84,602.Over the past 7 days, its price rose by approximately 4.83% to 9.99%; over the past 30 days, it rose by approximately 8.45%; and over the past 3 months, it rose by approximately 39.26%.Notably, on September 20, 2026, Bitcoin broke above $85,000, hitting its highest level since late January. Bitcoin’s all-time high was reached on October 6, 2025, at $126,200.
Hougan, Chief Investment Officer at Bitwise, believes that the “crypto winter” has ended and the market is entering a “crypto spring,” predicting that this could become the strongest and longest-lasting bull market in cryptocurrency history. He pointed out that while crypto asset prices have fallen, the industry’s fundamentals have not deteriorated.A September 2026 survey by Bitwise revealed that although the crypto market fell by approximately 50% between October 2025 and April 2026, none of the 15 large institutional investors surveyed planned to reduce their crypto holdings,with some even increasing their holdings, focusing on long-term investment logic rather than short-term price fluctuations.
OSL’s analysis noted that Bitcoin’s decentralized nature makes it attractive during periods of political instability, and that its performance during economic recessions may differ from that of traditional stocks, serving as a tool for hedging against inflation and diversifying investment portfolios.Crispus Nyaga, an analyst at Crypto.news, believes that a recession or financial crisis would initially deal a severe blow to Bitcoin, altcoins, and the stock market, but history shows that risk assets tend to rebound from their lows following intervention by the Federal Reserve and governments.
Overall, a potential “bubble” or correction in the stock market could impact risk assets—including Bitcoin—in the short term. However, as Bitcoin’s correlation with gold strengthens and institutional investors recognize its long-term value, Bitcoin may also demonstrate its potential as a safe-haven asset under specific circumstances.Investors need to closely monitor macroeconomic trends and shifts in market sentiment and carefully assess risks.
Bitcoin Trading Platforms
Bitcoin can be traded on numerous major cryptocurrency exchanges worldwide. Users can buy and sell Bitcoin on platforms such as BTCC, Pionex, CoinUp.io, Binance, KCEX, Hotcoin, BloFin, Azbit, Tapbit, Ourbit, DigiFinex, Toobit, Gate, Coinbase Exchange, and Deribit Spot.When selecting a trading platform, be sure to consider the platform’s compliance, liquidity, security, and the regulatory requirements of your jurisdiction.
The information on available trading platforms in this article is subject to change based on the listing and delisting activities of each exchange; please refer to the exchanges’ official announcements for the most up-to-date information.
