Will bitcoin hit a top this cycle and then crash? What to look for and whether to be concerned

00:02 Will Bitcoin hit a top this cycle and 00:05 then crash? Is that something you need 00:06 to worry about? How will you know if or 00:09 when that might happen? Let's talk about 00:11 it. Okay, so historically, Bitcoin's 00:13 gone in four-year cycles with three up 00:15 years, one down year, three up years, 00:17 one down year, three up years, one down 00:18 year. The peak of each of those up years 00:21 was 2013, 2017, 2021, and if that 00:26 pattern continues, you would expect that 00:28 to be 2025. Now the reason for those 00:31 waves is natural technological adoption 00:35 which happens to sync up in this case 00:37 with what's called the Bitcoin having 00:39 which happens the year of the 00:40 presidential election. So every four 00:42 years the amount of new Bitcoin that is 00:45 released onto the market as it gets 00:47 closer and closer to 21 million with 21 00:49 million being the hard cap uh drops in 00:52 half. So right now there's about 20 00:54 million bitcoin in circulation and the 00:56 remaining 5% which is the remaining one 00:59 of the 21 million bitcoin will be 01:02 released into circulation which is 01:03 mined. It will be mined by the bitcoin 01:05 miners between now and the year 2140 01:09 which is 115 years from now 115. So the 01:13 last 5% very very very very slowly is 01:16 released at uh into the marketplace over 01:19 the next 115 years as a reward to 01:21 Bitcoin miners. After that the Bitcoin 01:24 miners transition entirely to fees from 01:27 the Bitcoin network. Right now it's a 01:28 mix of the two. Well every four years 01:30 the amount of new Bitcoin released into 01:32 the market every 10 minutes drops in 01:34 half. And usually the year after that 01:36 Bitcoin having you see a a significant 01:39 bull run meaning an optimistic run. 01:42 that's caused by the decrease in the 01:45 supply of Bitcoin which finally is felt 01:47 by the market. It's usually a time a 01:49 time delay there. So usually it kicks in 01:51 you know six to you know 6 to9 months 01:54 after the having you start getting a 01:56 bull run and then it runs uh 01:58 significantly 01:60 uh through typically the end of October 02:02 or early November of the year after the 02:05 having which would be 2025 which is this 02:07 year. Now, people have been, you know, 02:10 some people think that four-year cycle 02:12 is going to continue. Others think the 02:14 four-year cycle is over because now 02:16 there is enough adoption that Bitcoin is 02:19 just not going to do four-year cycles. 02:21 Now, does that mean there's a time to 02:24 invest in Bitcoin? Well, obviously the 02:27 closer to the peak of the price of 02:29 Bitcoin, the longer you have to wait to 02:32 be in profit on your investment. So, if 02:35 you were investing essentially, for 02:37 example, at any time in the end of 2022 02:40 or 2023, you only had to wait for a few 02:43 months to be in profit on your 02:44 investment. And the likelihood that 02:46 Bitcoin ever goes back to those prices 02:48 is essentially zero. But the closer in 02:51 those three up years, the farther toward 02:54 the end of those three up years, uh, the 02:57 closer you get to a potential 02:58 correction. So, if you think of those 03:00 three up years like a baseball game and 03:02 a baseball game has nine innings, three 03:05 innings per year, then we're sort of in 03:07 the, you know, seventh, let's call it 03:10 seventh or eighth inning of nine. Okay? 03:14 Because we're in the third year, which 03:16 is 2025, and we're, you know, halfway 03:18 through through it. Um, so, but the big 03:22 difference here, give me one second. 03:27 The big difference is we have much more 03:29 adoption than we used to in the 03:32 marketplace. And at some point the 03:34 havingings are small enough and the 03:37 adoption is large enough that we're just 03:39 not going to do four-year cycles 03:40 anymore. Now, is that will we have a 03:42 four-year cycle this time or are 03:45 four-year cycles officially done? I 03:48 would say 50/50 chance of the two. So, 03:50 what do we do not knowing if it's a 5050 03:53 chance we'll have a big correction or 03:55 not? Well, the number one thing you can 03:57 do is subscribe to James Czech's 03:59 newsletter, a check on chain, which I 04:02 post periodically. He specializes in 04:06 doing the analytics of human behavior 04:09 that detect if you're near uh close to a 04:12 market top. So, how does one know if 04:14 you're close to a market top? Well, 04:16 there's a couple things you can look 04:17 forward to. One second. 04:23 Okay. So, first of all, 04:26 what always historically has preceded a 04:29 major correction in the price of Bitcoin 04:31 has been a huge run up in the price of 04:33 Bitcoin. And the reason Bitcoin goes 04:36 through a correction is because it went 04:39 on a huge run. So, market corrections 04:43 are not inevitable in any asset. Market 04:46 corrections happen in an asset because 04:48 the price of the asset gets ahead the 04:52 market adoption of the asset. So the 04:55 price starts to rise. People start 04:57 seeing it start to rise. People start 04:59 start speculating on that rise and then 05:02 the price rises faster than market 05:05 adoption can keep up. And if that 05:07 happens then the price of the asset has 05:09 to fall back to a sustainable level that 05:12 reflects underlying market adoption. So, 05:15 for for example, in the first big runup 05:17 in 2011, which was even before the 05:19 four-year cycle happened, the price ran 05:22 very quickly up to $32 and then crashed 05:25 to $2. It only crashed to $2 because the 05:29 the run up to $32 had been insane. It 05:32 went from like 5 to $32 very, very, very 05:36 quickly. And the market just wasn't 05:37 ready for that. There was not a not 05:39 enough people back in 2011 who 05:41 understand Bitcoin unders, you know, had 05:44 studied Bitcoin, understood what the 05:46 asset was, understood what they held. 05:48 So, as the price started to rise from 5 05:50 cents to $32, it went on this wild tear 05:53 of speculation that adoption worldwide 05:56 was right around the corner. And when it 05:58 became clear that wasn't going to 05:59 happen, it could not sustain $32 and it 06:01 dropped to $2. Now, notice $2 is still 06:04 way higher than 5. So if you invested at 06:07 the front of that, then you went through 06:09 this $32 and then it dropped to $2. 06:11 That's only a big drop. If you're 06:14 looking at the very peak of the top from 06:16 $32, it's a huge rise from 5 cents. So 06:20 then the same thing happened over the 06:21 course of a couple years until 2013 when 06:24 the price ran to I believe it was, let 06:29 me get my numbers here. Uh 06:33 $32 went to $2. Then it ran up to $1,200 06:38 and dropped to $92. And again, the only 06:41 reason it dropped to $92, now mind you, 06:43 $92 is 46 times as high as $2. So ran to 06:47 $32, crashed to $2, ran to $1,200, 06:50 crashed to $92. Again, the only reason 06:54 it had to price correct down to 92 was 06:57 because the market adoption was really 06:59 marching from $2 up to $92. But the 07:03 speculation on top of that market 07:05 adoption drove the price up to $112, 07:08 sorry, $1,200, and then it had to crash 07:11 back down to the fundamental level of 07:13 market adoption, which was down at $92. 07:16 And then the same thing happened. The 07:17 price ran up to $19,000, came back down 07:20 to $3,200, and again, that's from $92 at 07:23 the bottom to $3,200 at the bottom. Then 07:27 the price went up to $69,000 in 2021, 07:31 came back to $15,500. 07:33 Now here we are at $118,000. 07:36 So again, the only reason these major 07:39 price corrections happen is because they 07:41 are preceded by a huge price run. Now 07:44 since 2022, Bitcoin has gone on a big 07:47 run, but it's been slow and steady 07:50 relatively. It's I should say it's been 07:53 you know run up grind sideways for a 07:55 long time to sort of digest that then 07:57 run up grind sideways run up grind 07:60 sideways. So the r the price rise from 08:03 15,500 to 118,000 or whatever it is now 08:07 118 that price rise has been more 08:10 gradual and typically the more gradual 08:13 it is the more sustainable it is. People 08:15 have had a long time to get used to 08:18 higher prices of Bitcoin at each price 08:20 along the way. 08:24 So if somebody told me we had run from 08:28 $18,000 to $18 $18,000 in 6 months, I 08:32 would say get ready for a crash. Like 08:35 you can't you can't the marketplace 08:37 cannot adopt any technology that fast 08:42 where it suddenly 5x's in six months. 08:45 That's just no technology gets adopted 08:47 that fast. Not cell phones, not big 08:50 screen TVs, not the internet. Um I mean 08:54 nothing gets adopted where it's like 08:55 five times as many people adopt it once 08:58 the number numbers get large in like six 09:00 months. It just doesn't happen. But that 09:02 has happened pretty steadily over 2023, 09:04 2024 and half of 2025. And each of those 09:08 price rises has had a lot of time to 09:10 adjust which uh James Czech calls 09:12 chopolidation which is a combination of 09:15 chopping sideways and 09:18 so James Czech calls that chop 09:20 solidation. Consolidating sideways, 09:22 chopping sideways, chop solidation. So 09:24 what James Czech is always looking for, 09:26 which is why I read his newsletter. It 09:28 comes out two or three times a week. why 09:30 I always read it as soon as it hits my 09:32 inbox. What he's looking for is okay, 09:35 how fast has the price risen. Is it 09:37 getting ahead of what is sustainable? 09:40 How much Bitcoin is transacting that 09:42 represent people wanting to buy and sell 09:44 at that price? So, for example, let's 09:46 assume something dumb like eggs. Let's 09:48 assume eggs sell for $1 per egg. And 09:52 they go for $1 per egg and it's been 09:53 that way for 10 years. And then somebody 09:56 really wants an egg at 3:00 in the 09:58 morning. And so they meet somebody at 10:00 the marketplace at 3:00 am and pay $10 10:03 per for a for an egg. Now, you might 10:06 think as soon as the marketplace opens 10:07 the next day that the price of eggs is 10:09 now $10 per egg instead of $1 per egg 10:12 cuz someone just paid at 3:00 a.m. that 10:14 morning $10 for an egg. And the truth is 10:17 now that was a desperate situation. The 10:19 price might be higher than a dollar, but 10:21 it's not $10. So the same thing in 10:24 Bitcoin. The fact that the price is 10:26 $118,000. The question is, yeah, but how 10:28 much Bitcoin has really transacted at 10:30 $118,000? 10:32 Do we have a good sense that there are a 10:34 lot of people willing to buy Bitcoin at 10:36 $118,000, 10:38 or did we run up to $118,000 so quick 10:42 that there's hardly anybody transacting? 10:44 And if you look at the price rises in 10:46 2013, 20 2017, and 2021, most of those 10:50 price rises were so quick that there 10:53 just wasn't that many people 10:54 transacting. There was not a lot to 10:56 validate that the price belonged way up 10:59 at those levels because there just 11:01 wasn't that many people transacting 11:03 because it was just running up so fast 11:04 that there wasn't time for people to 11:07 transact. So James check looks for 11:09 things like that like how many people 11:11 are transacting at this level? How many 11:13 people have actually paid $118,000 for a 11:15 Bitcoin? Or is there just a few people 11:18 paying $118,000 for a Bitcoin? And most 11:21 people are sitting on their Bitcoin, 11:23 glad it's at 118, but not selling. So, 11:27 he also looks at how willing are uh 11:30 sellers that people have been in profit 11:32 a long time. So, you can tell on the 11:33 Bitcoin blockchain the last time every 11:35 Bitcoin moved. You don't know who moved 11:37 it, but you can tell when it moved. And 11:39 so he's looking at things like how much 11:41 people are in profit. So for example, I 11:44 know he's got a bunch of, you know, one 11:45 or two standard deviations and I'm not 11:47 going to go figure out the math on that, 11:49 but let's use round numbers. Let's 11:51 assume 11:55 let's assume for sake of argument that 11:58 the average person has a hard time 11:59 holding on to something once their 12:01 investment has increased by a value of 12:03 10. It's a fair assumption. So he looks 12:06 at things like, okay, how how much 12:08 higher is the price than the average 12:11 Bitcoin has transacted on the Bitcoin 12:12 blockchain? Meaning, how in profit are 12:15 the people holding Bitcoin right now? 12:17 Because the more and more inprofit those 12:20 people are, the more likely they are to 12:22 upgrade their lifestyles, to go on a 12:24 nice vacation, buy a new car, you know, 12:28 do an add-on to their house, whatever it 12:30 is they want to do that might involve 12:31 spending some Bitcoin. Because if you 12:33 have a ton of Bitcoin held by people 12:36 that are seriously in profit and then 12:38 the price goes on a huge run, what 12:41 typically happens is people are like, 12:42 "Wow." They start feeling really rich 12:44 and they start feeling really ri rich 12:46 and wealthy people spend more money and 12:49 so they start spending their Bitcoin and 12:51 at some point they start spending more 12:54 Bitcoin than the market can absorb by 12:56 new Bitcoin adopters. And then you see 12:59 the price correction. And then as the 13:00 price corrects, people who have borrowed 13:02 money to buy Bitcoin get wrecked. They 13:05 get wiped out, you know. So then they 13:06 have to dump their Bitcoin. So then the 13:08 price starts dropping more. Speculators 13:10 who thought they wanted to own it when 13:12 it was going up decide they have no idea 13:14 what they own and they want to sell it 13:16 on the way down because they're scared 13:17 of it because they don't know what it 13:18 is. Anyway, you just get that and then 13:20 it goes through a price correction. So 13:21 are we going to have a price correction? 13:23 If we do, most people like me would 13:26 anticipate that a big significant price 13:28 rise would happen before that happens. 13:30 Now, could we price correct 20 or 30% 13:33 off 20 off the 2020 the uh $123,000 13:38 high that we had last week or the week 13:40 before sometime in the last like week or 13:42 two, it went up to 123. Yeah, we could 13:45 absolutely price correct uh you know 20 13:48 or 30% off that level. I don't think 13:51 we're going to correct 50% or more off 13:54 that level just because we haven't had a 13:56 huge up uptick. 13:59 You know, that happened very rapidly yet 14:01 unless you want to consider the most 14:02 recent price rise. But again, the most 14:04 recent price rise was mostly like, you 14:07 know, 105 up to 118. And that's just not 14:11 a huge price rise that you're going to 14:12 get a massive price correction as a 14:14 result of that from. So, nobody knows. 14:16 The short thing is nobody knows when 14:17 we're going to get a price correction. 14:19 If we do, the magnitude of the price 14:22 correction is heavily a function of how 14:25 big the price rises were before that 14:28 happened and 14:31 how long of consolidation happened to 14:34 enable the market to digest that new 14:37 higher price with new market adoption 14:40 because only 5% of the world owns 14:42 Bitcoin today. 95% of the world doesn't 14:44 own Bitcoin today. So that's a ton of 14:46 people that still need to adopt Bitcoin, 14:49 but it takes people a long time to 14:50 understand Bitcoin. I mean, humans just 14:52 have a hard time understanding 14:54 completely paradigm shifting new things 14:57 uh like Bitcoin. They just do. It's just 14:59 takes people time to understand and 15:02 adopt. So 50% chance we get a a big 15:05 price correction, but I don't think 15:06 again if we get price corrections off of 15:09 today's prices, I don't think they're 15:11 more than 20 or 30%. If we get a big 15:14 price run, let's call it from 118,000 up 15:17 to 180,000. Let's say we do that. Let's 15:19 say the four-year cycle of the live and 15:21 well, it's only a matter of time and 15:23 it's going to peak in late late October 15:25 or early November like it did in 2017 15:28 and 2021. What does that look like? It 15:31 probably looks like the price running at 15:34 some point, you know, July, August, 15:35 September, October, somewhere in there, 15:38 the price gets a huge uplift from 15:42 118 and runs up very quickly to 180,000. 15:46 If that happens, if we get a price run 15:48 from 118 to 180,000 that happens in a 15:51 matter of six or eight weeks, yeah, 15:54 we're probably going to get a price 15:55 correction. Now, the reason I don't buy 15:57 and sell Bitcoin anticipating things 15:59 like that is we don't know. Is the is 16:01 the runup going to be to 160, 165, 175, 16:05 180, 190, 210, 220? Nobody knows. Most 16:10 people think if we get a very aggressive 16:12 price rise. I don't I don't know anybody 16:15 predicting before the end of October 16:17 it's going to go above 240, which would 16:19 be double the current price of 118. I 16:21 don't know anybody that's that thinks 16:23 it's going to run quicker just because 16:26 again I mean we're a $2.5 trillion 16:28 asset. So you got to have a $2.5 16:30 trillion asset turning into a $5 16:32 trillion asset in a matter of months. 16:35 That's just very I mean it's it's very 16:37 difficult for things that are already as 16:39 big as Bitcoin at 2.5 trillion in total 16:42 size. It's very difficult for people 16:44 things like that to suddenly boom, you 16:47 know, double in size just like in a 16:50 matter of months. It's just again it's 16:52 hard that that requires so much money 16:55 dumping into Bitcoin to drive the price 16:57 higher by new adoption that you just 16:59 typically don't get that. But if that 17:01 happens, if somebody if we ran to 240 17:04 and somebody said, "What happens next?" 17:05 I would say get ready for a 50% price 17:08 correction. We're probably coming back 17:09 to 120 very temporarily. Now, you might 17:12 think, well, I'll just wait and buy it 17:14 after the price correction. The problem 17:15 is if we run up to 240, where are we 17:18 going to correct to? You don't know. Is 17:20 it going to be 120? What if it's 130 and 17:22 you're waiting for 120? You totally miss 17:25 out. What if it's 140 and you're waiting 17:27 for 130? You totally miss out. Nobody 17:30 knows. See, nobody knows where the peaks 17:32 are and nobody knows where the valleys 17:34 are. Which means the only thing you can 17:35 really do is just buy Bitcoin and sit on 17:38 it for as long as conceivably possible, 17:40 which is what I always recommend to 17:41 people. Just buy Bitcoin, sit on it for 17:43 as long as conceivably possible. That's 17:45 the only thing that has ever 17:47 consistently worked because you don't 17:49 know what high is. You don't know what 17:51 low is. So, are we going to get a price 17:53 correction 50/50? How will we know? If 17:56 there's a huge price rise, the higher 17:59 the price goes very quickly, the higher 18:02 the likelihood of a significant 18:04 significant price correction because the 18:06 adoption in the marketplace just can't 18:08 sustain that aggressive of a, you know, 18:11 of a very quick price rise. It just 18:13 that's just the way you know things 18:15 work. Um so are we going to get a big 18:18 price rise? It you know uh I I think 18:20 we're going to get additional price 18:22 increases between now and the end of the 18:24 year. Um and is there going to be a 18:27 price correction? It depends on how big 18:28 the price rise is. A bigger price rise 18:30 means 18:32 you know means the possibility of a 18:34 greater correction. But again do not try 18:36 to time that market because you will get 18:38 burned every time. That's what always 18:39 happens is people people start try to 18:42 they try to outsmart the market and 18:44 they're like, "Hey, I'm going to buy it 18:46 low and then I'm going to sell it high 18:48 and then I'm going to buy it back low 18:49 and then I'm going to sell it." You 18:51 know, don't do that. You're going to get 18:52 burned. Everybody gets burned trying to 18:54 do that. Um because you just can't. 18:56 Humans can't time the market. We can't 18:58 time highs and lows. There's no way to 19:00 know what high is. There's no way to 19:01 know tell what low is. Just don't do 19:03 that. It's just you're going to get 19:05 burned. Um, so anyway, it's gonna be 19:07 exciting le rest of the year. Um, I'm 19:09 going to be reading James Czech's 19:11 newsletter every time it hits at least 19:14 usually once a week. He'll do a sort of 19:15 a deep dive that looks at the 19:17 marketplace, the likelihood that we're 19:19 getting close to a top, you know, etc., 19:21 etc. And he'll do the same thing in the 19:23 reverse. If we go through a price 19:24 correction, he starts the analysis all 19:26 kicks in and he's like, "All right, 19:27 let's talk about it. Are we seeing the 19:29 behavior of people that are done selling 19:32 or are we seeing the behavior of people 19:34 who are just getting started selling 19:36 which can give you a sense of like okay 19:38 you know again you can't he can't time 19:40 the bottom he can't time the tops he 19:42 can't do any of that but he can help you 19:44 understand likelihoods so for example 19:48 the last time uh we went through a price 19:50 dip of uh of 30% which was I think in 19:54 April I think we dropped from like I 19:56 don't know 109 down to 74, you know, 19:60 temporarily. And he said, "Look, I think 20:02 there's a 70% chance we go significantly 20:04 higher from here. There's a 30% chance 20:07 it could drop even further." You know, 20:09 use your best judgment. Which that's all 20:11 you can do. That's all you can do is 20:12 offer people that, which is 70% chance 20:15 we're done selling here down in the 70s 20:17 and it's a fantastic time to buy. 30% 20:20 chance we could edge a little lower. And 20:22 then you just use your best judgment. Um 20:24 but again um saying he's saying the same 20:26 thing now is you know his most recent 20:28 updates are like look I don't think 20:30 we're at the top. It feels like we got a 20:33 good ways to run. 20:36 You know we'll find out. We'll look at 20:37 the data. So the best way to find out if 20:39 we're near a top or bottom is James 20:41 check with his check onchain newsletter. 20:44 I typically post the ones that are most 20:45 relevant with a few highlights. uh if 20:48 you want the full meal deal, it costs 20:49 $29 a month, which I it's the only thing 20:52 I subscribe to in the Bitcoin world. Um 20:55 anyway, so um it's the only analyst I 20:58 trust, the only one I think that's worth 20:60 anything. So James Check is is the best 21:02 guide for whether we're near the tops or 21:04 bottoms and we'll continue to do videos. 21:06 Hopefully those are helpful. 21:08 And I feel like if somebody said, you 21:10 know, where are we going to go between 21:12 now and the end of October? I would say 21:14 at least 140 to 160. Um, and then 21:18 depending on how long how quickly we get 21:20 there, what news stories are announced 21:23 while we get there because there's again 21:26 yesterday uh Coinbase announced I think 21:28 a PNC Bank a major partnership that PNC 21:31 Bank customers are going to be able to 21:33 buy Bitcoin um using Coinbase. So, it's 21:36 like, okay, if you get major 21:37 announcements from Coinbase and or River 21:40 and major financial institutions that 21:42 are going to make it super easy for 21:44 average people to walk in a bank branch 21:46 and pay Bitcoin. Yeah. Well, suddenly 21:48 160 or 180 is way more sustainable than 21:51 if you just run up there, you know, with 21:53 no new major news stories of adoption. 21:56 But anyway, hope all that helps. Have a 21:58 great day, everyone. I'm here to help in 21:60 any way I can. Thanks.