The Crypto Crash Was Just A Dress Rehearsal For What’s Coming Next
By PNW Staff October 13, 2025
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When everyone's chasing the same thing, danger isn't far behind. The markets have become a mirror of our herd instincts--moving not by wisdom or discernment, but by imitation. The latest crypto crash, triggered by Trump's surprise tariff announcement on China, exposed just how fragile this crowd-following world really is.
Within a matter of hours, billions evaporated. Traders watched helplessly as their screens froze, their accounts were liquidated, and their supposed "safe strategies" turned into financial freefall. What happened wasn't just a crypto collapse--it was a glimpse into the deeper sickness infecting modern markets.
When Algorithms Panic
When Trump announced his new 100% tariff on China last Friday, it was enough to spark one of the fastest chain reactions in digital market history. Bitcoin plunged nearly 10% in a single day, Ethereum dropped over 12%, and more than $17 billion in leveraged positions were wiped out within hours.
Those numbers are staggering--but the mechanics behind them are even more alarming. This wasn't millions of human traders simultaneously choosing to sell. It was the algorithms. The bots. The automated systems designed to "protect" investors by following trends and reacting instantly. But in times of crisis, these same algorithms amplify panic, not prevent it.
One investor described the experience like watching a car crash in slow motion. As prices fell, the bots dumped more. As they dumped, the exchanges lagged. And when traders tried to get out, the system froze. Within minutes, entire positions were gone--liquidated automatically, without warning or mercy. And even when people wanted to make deposits to buy the dip... the only response from the platforms was that deposits were currently frozen.
That's what happens when everyone follows the same signals. The machines all see the same data, make the same moves, and execute the same trades--until the entire market becomes a self-reinforcing panic spiral.
This is what happens when a "smart market" becomes an automated mob.
And here's the real warning: what happened in crypto isn't confined to crypto. The same structure now dominates the stock market.
The Passive Investing Illusion
For decades, financial experts told us that "passive investing" was the safest path to wealth. Just buy an index fund, they said. Don't try to beat the market--just be the market.
That strategy worked beautifully while times were good. But like all crowds, it only works until it doesn't.
Today, passive index investing doesn't just represent the crowd--it is the crowd. The vast majority of investment capital now flows into index funds that don't think, don't question, and don't analyze. They simply buy whatever is in the index, regardless of value, risk, or logic.
In other words, nobody's driving the train.
It's a bit like a subway car that's been hijacked, and everyone's sitting calmly--until someone realizes there's no one in the driver's seat.
When investors pour billions into the same handful of funds, those funds pour billions into the same handful of stocks. And those stocks--Apple, Microsoft, Nvidia, and a few others--grow to represent a massive portion of the entire market's value. Their rise pushes the indexes higher, attracting more investors, which brings in more money, which pushes prices even higher.
It's a feedback loop of blind optimism.
But the danger is that in this world, no one is truly making a market anymore. The majority of investors aren't studying company balance sheets or assessing risk--they're simply trusting the system to keep growing. The problem? When everyone trusts the same system, nobody's ready when it breaks.
And eventually, it will break.
The Price of Blind Faith
Every bubble is built on the same illusion: that this time is different. Today's illusion is that algorithms and passive funds have somehow made markets safer and more efficient. But in reality, they've made them more fragile than ever.
The stock market today trades at valuations eerily similar to those seen before every major crash in history. Price-to-earnings ratios are stretched, total market value relative to GDP is near record highs, and optimism about artificial intelligence has created a feverish belief that profits will somehow rise forever.
But history is merciless to such beliefs.
During the dot-com boom, people were also "right" about technology changing the world--they were just early. By the time the truth caught up, investors had lost 75% of their money. The same could easily happen again if faith in AI-driven growth turns out to be misplaced--or simply delayed.
The deeper danger, though, isn't any one sector or stock. It's the structure of the system itself. When everyone is positioned the same way, risk isn't spread out--it's concentrated. And when the tide turns, there's nowhere to hide.
When index funds fall, they fall together. When ETFs sell, they sell everything. There's no thinking, no pause, no reflection--just the cold execution of a mathematical rule.
When the Crowd Collapses
The ramifications of a true market collapse in today's environment would be far worse than past crashes. Because this time, almost everyone is exposed to the same few investments through their retirement accounts, index funds, and 401(k)s.
The illusion of diversification is just that--an illusion. The market has become a single, giant trade: the trade of faith in perpetual growth.
When that trade unwinds, the losses will ripple through every level of society--retirees, institutions, pensions, and governments. And because the modern economy is built on confidence, the psychological damage could be as severe as the financial one.
If the crypto collapse taught us anything, it's that systems built on uniformity collapse faster and harder than anyone expects.
Thinking for Yourself Again
The antidote to herd madness isn't panic--it's independent thinking. True investing requires courage: the courage to stand apart, to question consensus, to hold cash when others chase returns, and to seek value when others are blinded by hype.
It's not about predicting the future--it's about surviving it.
The irony is that diversification, once the foundation of smart investing, has been replaced by a different kind of uniformity disguised as safety. But genuine diversification means not following the same path as everyone else. It means owning different kinds of assets, thinking differently, and being willing to sit out the mania.
Because when everyone's on the same side of the boat, it doesn't take much for it to tip.
The market's strength today is an illusion of unity. Its weakness will come from that very same unity. And when the algorithms panic and the passive funds unload, the crowd that once felt invincible will learn again the oldest rule of the market:
The crowd is always right--until the day it isn't.
When markets unravel, it isn't just portfolios that suffer--it's trust, order, and confidence in human systems. Each crash chips away at the illusion that mankind can build a self-sustaining world without God. The digital age promised control, but what we're seeing now is fragility disguised as strength. Every algorithm, every market model, and every illusion of safety eventually meets reality--and that reality is humbling the modern world once again.
And for those who are not quite sure what this has to do with Bible prophecy, one only needs to look at the history books and see how such economic impacts pave the way for dramatic societal change. Financial collapse has always been the prelude to moral and political upheaval. The stage is being set for something far larger than a market correction--it's the rearranging of a world order that has forgotten its Maker.
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