Why does bitcoin’s price keep coming back down after it tries to rise? How long until $110,000+?

00:01 Hey everyone, let's talk about what is 00:03 happening when Bitcoin's price starts to 00:05 rise and then it falls back and then it 00:08 tries to rise again and then it falls 00:10 back and just when you're getting your 00:11 hopes up because it's rising again then 00:14 it falls back. What's actually going on 00:16 behind the scenes there? Well, first of 00:18 all, Bitcoin is one of the first 00:20 opportunities typ typically that people 00:22 have experiencing something that is 00:25 affected by the laws of supply and 00:27 demand. So every stock, every bond, 00:29 every commodity, basically everything 00:31 you buy or sell in your life is affected 00:34 by the laws of supply and demand. But 00:36 almost none of those things are globally 00:39 traded 24/7. In fact, none of those 00:42 things are globally traded 24/7 other 00:45 than Bitcoin. So when people buy Bitcoin 00:47 for the first time, it's usually the 00:49 first time that they've experienced an 00:51 asset that they can watch the price go 00:54 up and down literally every second of 00:56 every day as long as they want, no 00:57 matter how long they want to do it. And 00:59 that is a new experience for most 01:01 people. Even the stock market, if people 01:03 own individual stocks like Tesla or 01:05 Amazon or Apple or Microsoft or Google 01:08 or Facebook or or Nvidia or something 01:10 like that, even those stocks only trade 01:13 during stock market hours and the stock 01:16 market is only open 6.5 hours per day 01:20 and it's closed on, you know, bank 01:22 holidays and all that. So, the stock 01:24 market only trades 19% of the time, 1 n% 01:28 of the time. That means 81% of the time 01:31 the stock market is closed which means 01:33 the vast majority of the time that you 01:35 check the price of a stock it's not 01:38 going to be moving because the stock 01:40 market's closed which means the price is 01:41 not moving. So what is going on when 01:44 Bitcoin rises and then falls and then 01:46 rises and then falls. Well, so what's 01:48 happening is you are experiencing supply 01:51 and demand upfront and personal and 01:54 you're seeing it completely unfiltered. 01:57 So, let me tell you what happens when 01:58 the price rises. So, this morning I woke 02:00 up, I checked the price of Bitcoin. It 02:02 is $109500. 02:04 So, $19,500. 02:07 So when the price starts to rise from 02:10 108,000 to 109,500, 02:13 the very first thing that happens is 02:15 idiot day traders who are trying to time 02:18 the market by buying when it ticks up 02:21 and uh sorry, selling when it ticks up, 02:24 buying when it ticks low, and doing that 02:26 over and over and again, those day 02:28 traders sell when the price starts to 02:30 rise. Now, virtually all of those people 02:33 lose money. I do not ever recommend 02:35 anyone try day trading. It is a losers 02:38 game. Everyone who tries it literally 02:41 more than 99% lose money. Don't do that. 02:44 But there are people that are convinced 02:46 that they are special that they can do 02:47 that. So when the price ticks up, those 02:49 people start dumping the day trading 02:51 Bitcoin. So that is one of the reasons 02:54 the price starts to go back down when it 02:57 rises is because you've got day traders 02:59 dumping it. Uh another reason is you 03:02 have funds that are rebalancing. So if 03:05 somebody has a fund that uh they want to 03:08 be 20% Bitcoin and 80% other stuff and 03:12 the price of Bitcoin goes up by 5% or 1% 03:16 or 2% suddenly their fund is overweight 03:19 in Bitcoin and anytime their fund 03:22 becomes overweight in anything whether 03:25 it's Bitcoin or Tesla stock or anything 03:26 else they sell some of the thing that 03:29 went up and rebalance by buying some of 03:33 the other assets. assets that are lower 03:35 by comparison. So if that fund edges up 03:38 to uh it used to be 20% Bitcoin and now 03:42 because the price of Bitcoin went up, 03:43 it's 21% Bitcoin and 79% everything 03:46 else, they will sell 1% of the of the 03:50 fund of the Bitcoin, which is about 5% 03:52 of their Bitcoin. They will sell that 03:54 and then they will use that money to buy 03:56 more of whatever represents the 79% so 03:60 that it is back to balanced at 8020. So 04:02 that happens. Um also everybody who owns 04:06 Bitcoin when the price rises from 04:08 $108,000 04:10 to uh 200 $ 109,500 04:14 a bunch of people feel slightly 04:16 wealthier and when people feel slightly 04:19 wealthier they decide to use some of 04:22 their Bitcoin to improve their lives in 04:24 some way. So, for example, I keep very 04:27 uh well, as far as improving life, you 04:30 know, the major purchase purchases I've 04:32 made recently is I uh installed a 04:35 generator at my house so that my 04:37 electricity stops going out because 04:39 energy to save their lives cannot seem 04:41 to keep the power on. It's constantly 04:43 going out about once every week or two, 04:45 which is absolutely insane. But anyway, 04:47 I bought a generator. Now, I'm still 04:49 accumulating Bitcoin and with every 04:51 paycheck every two weeks, but that 04:53 generator cost more than a handful of 04:55 paychecks. Um, so as a result of that, 04:58 you know, when the price goes up, people 05:00 start feeling like they can afford a 05:02 vacation or a generator or a new car or 05:06 an add-on to their house. So, as the 05:08 price goes up, people who have been 05:10 holding Bitcoin a long time decide that 05:12 they are now wealthy enough that they 05:13 can afford to buy things. And so they 05:16 may liquidate $500 a bitcoin or $1,000 a 05:19 bitcoin or substantially more if they're 05:21 buying something uh you know a nice 05:23 vacation or something like that. So that 05:25 is happening and so then uh and then 05:28 you're dealing with 05:30 um you know people with emergencies that 05:33 uh you know they've been waiting for 05:35 they've been waiting to liquidate some 05:36 Bitcoin to pay off a medical bill and 05:39 they didn't want to do it at $108,000 05:41 Bitcoin but now at $109,500 they're like 05:45 you know I really ought to pay off that 05:46 medical bill and so they liquidate some 05:48 Bitcoin. So, as the price rises, 05:51 uh, everybody who could possibly want to 05:53 liquidate Bitcoin for any reason looks 05:56 at the price and they're like, "Ooh, 05:57 it's up a little bit. I'll liquidate 05:59 just a little bit." Now, the reason 06:01 Bitcoin's price always eventually goes 06:04 up, is that those people can only 06:06 liquidate the same Bitcoin once. So, 06:10 once someone has sold some Bitcoin to 06:12 buy a generator or they have sold some 06:14 Bitcoin to go on a nice vacation or buy 06:17 a car or put an add-on on their house or 06:19 pay for a medical bill, they can't sell 06:21 the same Bitcoin a second time. Which 06:24 means essentially what's happening as 06:26 the price goes up, uh, all of that 06:28 Bitcoin that is now mobile, that is now 06:32 willing to move at a price of 109,500 06:36 can only be sold once. And so all that 06:40 has to happen for the market to readjust 06:42 to a new price is for the um the people 06:46 that are willing to sell at 109,500 06:49 to effectively get that Bitcoin out of 06:53 their system and for it to be bought up 06:55 by the marketplace. Now the exact same 06:57 thing is happening on the uh demand side 06:60 is h as is happening on the supply side. 07:02 So, every time the price starts to fall 07:04 back as a result of all of these things 07:07 we've just been talking about, there's 07:09 people like me out there who are like, 07:10 "Ooh, it's back to 108,000. Uh, I better 07:14 go see if there's any money I can scrap 07:16 together to go buy some more Bitcoin." 07:17 There's people who are buying Bitcoin 07:19 for the first time that they check the 07:21 price and they're like, $ 109,500? 07:24 That's kind of expensive. Maybe I missed 07:25 it. Maybe I'll sit on the sidelines. 07:27 Then, as a result of the price getting 07:29 pushed down by all of the people who do 07:31 all of the things I've just been talking 07:33 about, those people check the price, 07:34 they're like, "Oo, $108,000 Bitcoin." 07:37 Now, 109,500 seemed a little expensive, 07:40 but now that it's back at 108, maybe 07:42 I'll load up on some Bitcoin. So, every 07:44 time the price goes down, the reverse 07:46 happens, which is all the people who 07:48 have a reason to buy Bitcoin, they're 07:50 rebalancing funds. they've got some 07:53 extra cash available, their paycheck 07:54 hit, they're starting to understand 07:57 Bitcoin better, and they want to 07:58 increase their uh allocation of their 08:00 net worth from, you know, 1% Bitcoin to 08:04 5% Bitcoin or 5% Bitcoin to 10% Bitcoin. 08:07 All of those people as the price drops 08:10 buy more Bitcoin, which pushes the price 08:12 back up. Um, now there's 95% of the 08:16 world does not own any Bitcoin and only 08:18 5% of the world does own Bitcoin. So 08:20 over time, the 95% is always going to 08:24 outrun the 5% because the 5% of people 08:27 who own Bitcoin can only sell their 08:29 Bitcoin once. And the 95% of the people 08:32 who do not own any Bitcoin have way more 08:34 money than the people who own Bitcoin 08:37 have Bitcoin to sell. So if you think 08:39 about it, imagine uh two piles of 08:42 Bitcoin. You know, one's like, I don't 08:44 know, 5t tall, which is the 5%. So, 08:48 there's like a five- foot tall pile of 08:50 Bitcoin and that's the people who 08:52 already own it and that's their Bitcoin. 08:54 And every time the price tries to rise, 08:56 uh, they sell a little bit and it pushes 08:58 the price down, which means the stack 09:00 that they have to that they're sitting 09:02 on is slightly smaller. Now, imagine a 09:05 stack of US dollars that is 20 times as 09:08 tall, that is 95t tall of US dollars 09:12 that can be converted into Bitcoin. 09:14 Again, there's way more dollars in the 09:17 system than there are Bitcoin in the 09:19 system. There's way more assets. The 09:21 total assets of the world is about um 09:24 $1,000 trillion. So, if you add up all 09:28 of the assets that people own in the 09:30 entire world, it's about a,000 trillion. 09:33 Uh which is like a quadrillion or a 09:35 quintilion. It's one of those two. I 09:36 think it's quadrillion. Anyway, that's 09:38 all the assets. That's real estate, 09:40 stocks, bonds, uh all fiat currencies 09:43 combined. Basically, precious metals, 09:45 jewelry, uh Picasso paintings, every 09:49 conceivable thing of value that people 09:51 own in the entire world is worth about 09:53 $100 trillion. Sorry, $1,000 trillion. 09:57 Bitcoin only represents $2 trillion. 10:01 That means Bitcoin is 210 of 1% 1/5if of 10:05 1% of the assets that people own in the 10:09 world. That's a tiny tiny tiny tiny tiny 10:12 tiny percent. Uh it's 2%. So 2 trillion 10:15 is 2% of 100 trillion which means it's 10:18 2% 1/5 of 1% of 1,000 trillion which is 10:22 all the assets in the world. So what 10:24 what's happening over time is more of 10:27 that 1,00 trillion in assets are pouring 10:30 into Bitcoin and inevitably over time 10:33 they overwhelm the people who are 10:35 willing to sell their Bitcoin at 109,500 10:39 or 112,000 or whatever it is. And when 10:42 that demand overwhelms the supply, it 10:45 pushes the price higher because again 10:47 all of those people that are selling can 10:49 only sell once. So once they sell, they 10:52 don't have that Bitcoin to sell again. 10:53 So the next time the price goes up to 10:57 110,000, all that Bitcoin that got sold 11:00 at 109,500 can't be sold by the same 11:04 people over again. And the people who 11:06 bought it at 109,500 don't want to sell 11:08 it at 110,000 because that's like.5% 11:12 profit. It's like nothing. Um, so 11:14 inevitably over time the people who are 11:16 selling get overrun with the demand of 11:19 the people that are buying and then the 11:21 price goes up. So when the price reaches 11:23 a new level, so we're about 50% higher 11:26 than the maximum price that was reached 11:29 for the seven sorry 8 months that 11:32 Bitcoin traded between 55,000 and 11:35 actually I've got an incoming call so I 11:37 got to take this. So, we're about we're 11:38 up about 50% already um from the highest 11:42 price that Bitcoin hit for about 8 11:44 months of last year and uh you know and 11:47 it's taken time to digest that. So, last 11:49 time it took about 8 months to digest a 11:51 50% price movement and now we're up 50% 11:54 higher and I don't know how long it's 11:56 been 7 months since we first crossed 11:59 $100,000. So, I'm expecting any day now 12:02 to definitively break above $110,000 and 12:06 stay there, you know, hopefully forever, 12:08 but at least a long time. Um, and we 12:11 might get some temporary price dip that 12:13 drags it under there temporarily. But, 12:15 um, anyway, I'm expecting that to happen 12:17 anytime. I don't know when that's going 12:18 to happen. It's just it's like a pig and 12:20 a python and it feels like it's been 12:22 long enough that it's about time where 12:25 all of the Bitcoin that wanted to be 12:27 sold at any of the price points that 12:29 we've been around, it feels like it's 12:32 had about as much time as it needs to be 12:34 sold at those price points. which means 12:35 I'm expecting any hour now or any day 12:38 now for the price to relatively rapidly 12:40 go to $120 to $125,000 12:44 which is what James Czech predicts will 12:46 be sort of the next range that we'll 12:47 have to to spend some time at and then 12:50 you know up from there. Um so anyway uh 12:53 it feels like enough time has passed 12:55 could be any minute could be any day 12:57 could be any week could take more time I 12:59 don't know but now continues in my 13:02 opinion to be a great time to buy 13:03 Bitcoin. Uh, and it's only a matter of 13:06 time till the demand outstrips the 13:09 supply and the price goes up. Have a 13:11 great day everyone. Thanks.