00:01 Why does Bitcoin take breathers along
00:03 the way to digest different price
00:06 levels, right? Like right now where
00:08 we’ve been sort of stuck at 118,000 for
00:10 what feels like a week or two. The
00:12 answer is because the nature of human
00:14 behavior is such that when you reach new
00:17 price levels, people have to get used to
00:19 that price level. And the reason is
00:21 people sell when they’re in a certain
00:23 amount of profit. So, James Czech, my
00:25 favorite Bitcoin analyst, walks through
00:28 a lot of these price levels and why they
00:30 are that way. So, think about it like a
00:32 kid in a candy store. So, how long are
00:35 you going to have to spend in the candy
00:36 store? The question is, well, how much
00:37 money does the kid have to shop for
00:39 candy? And uh if a kid is used to having
00:42 $10 uh in their savings and they’ve had
00:45 $10 for a long time and then suddenly
00:48 they have $20, well, they’re going to
00:49 want to spend some time in the candy
00:50 store because the kid is feeling wealthy
00:53 now. They’re used to having $10, now
00:54 they have $20. Um, same. If they have
00:58 suddenly $30, so they suddenly have
00:60 three times as much money as they are
01:02 used to having, then they’re going to
01:04 want to spend a lot longer in the candy
01:06 store until they have bought enough
01:08 candy that they are back down to the $10
01:10 or so that they are used to having.
01:12 Well, Bitcoin and any other investment
01:14 asset works the same way that when
01:16 people are in a certain amount of profit
01:19 as a percentage, they are inclined to
01:22 improve the quality of their lives and
01:24 their famil family’s lives. And you can
01:26 actually map that all out. So James
01:27 Czech, my favorite Bitcoin analyst, that
01:29 is one of his specialties. He looks at
01:32 the Bitcoin price and he says, “Okay,
01:34 right now we’re at 118,000.
01:36 The average price that anyone’s paid for
01:38 that Bitcoin is whatever. Pick a
01:41 number.” He he outlines on a lot of that
01:43 in his research. And for example, right
01:46 now sitting at 118,000, he says
01:49 somewhere between 132,000 and uh, you
01:53 know, so we’re going to take a breather
01:54 where we are for some period of time.
01:56 You know, could be days, could be weeks,
01:58 could be, you know, nobody knows. There
01:59 could be a dip along the way before
02:01 we’re sort of back on track. No track.
02:03 Nobody knows. For example, we took a dip
02:05 when the US bombed Iran because
02:07 everybody freaked out even though
02:09 there’s no reason to sell Bitcoin when
02:11 somebody bombed somebody. But in fact, I
02:14 would buy Bitcoin because it means the
02:15 world’s more unstable. But, you know,
02:18 people freak out that there could be a
02:19 dip along the way. But, uh, according to
02:21 James Czech, what is likely to happen is
02:23 look, at some point we will break above
02:25 this $118,000
02:27 that we are at. And then uh he thinks
02:30 sort of the next breathing zone, the
02:33 next time it’s going to take to digest
02:35 everything is between 132 and 140,000.
02:38 And again, that’s because he’s looking
02:40 at all of the Bitcoin that is currently
02:41 owned. He doesn’t know who owned it, but
02:44 he can tell the last time that that
02:45 Bitcoin transacted on the Bitcoin
02:47 blockchain, and he can tell how much
02:50 profit Bitcoin is in. So the average
02:53 Bitcoin is in, I’ll pick a number, 150%
02:56 profit. and he knows that let’s call it
02:59 175% profit people just find it
03:02 irresistible to improve the lives of
03:05 themselves and their family. It just is.
03:07 And you could see that through the
03:09 entire history of Bitcoin. When people
03:11 get a certain percent
03:13 on their investment, they’re inclined to
03:16 improve their lives of them and their
03:18 families. And so you got to take time
03:19 for the people who are in that much
03:21 profit to do that. And of course, it’s
03:23 not universal. I mean, I’m in, I don’t
03:25 know, triple quadruple profit on average
03:27 to the price I’ve paid for Bitcoin. Um,
03:32 there’s nothing I want to buy right now.
03:33 So, it’s not it it doesn’t mean when
03:35 somebody’s in a lot of profit that
03:37 they’re automatically going to spend
03:39 some of their Bitcoin improving their
03:41 lives or their family’s lives. It just
03:43 means statistically it’s more likely. So
03:46 uh for example statistically it is quite
03:49 likely that somewhere between 132,000
03:52 and 140,000 enough people will be in
03:55 enough profit in Bitcoin that we’re
03:57 likely to spend a decent amount of time
03:59 somewhere in that range waiting waiting
04:01 for everybody who wants to improve their
04:03 lives and the lives of their family to
04:05 spend whatever Bitcoin they were
04:07 planning on spending and waiting for the
04:09 market adoption of Bitcoin to absorb
04:12 that newly spent Bitcoin until the
04:14 people who are at that level are done
04:17 spending, you know, spending Bitcoin.
04:19 The same thing happened at, you know,
04:21 let’s call it $108,000.
04:23 Again, it bounced around a good bit, but
04:25 on average, it just seemed to be stuck
04:26 for a while until one day all the people
04:30 that wanted to spend at that level
04:31 suddenly were done spending and we
04:33 rocketed up to 123 and then came back
04:36 down to 118 and now we’ve been showing
04:38 at 118 uh 118 uh around 118 for a while.
04:43 Okay. So, what happens at higher levels?
04:45 Well, according to James Czech, once we
04:47 get north of between $160 and $165,000,
04:51 things are getting pretty steamy, as in
04:54 now the average holder is in a lot of
04:56 profit and a lot more profit than they
04:59 normally are willing to sit on without
05:02 spending some. And so according to him,
05:05 once you get up in that level, if you
05:07 get there really fast, you might end up
05:09 with a little price correction to get to
05:12 get as some of those spenders, they
05:14 spend and the market can’t quite absorb
05:17 enough of that Bitcoin uh you know to to
05:20 keep up. Now always eventually the
05:23 market adoption of bitcoin since you
05:25 know in the ballpark of 5% of the world
05:27 owns any bitcoin and 95% doesn’t that
05:30 means at that adoption grows over time
05:33 they absorb that bitcoin from people who
05:35 are spending it and the price eventually
05:37 goes up in the long term once bitcoin is
05:40 adopted 100% by everybody in the world
05:43 then you won’t get these ups and downs
05:46 like that you know everybody who’s
05:47 spending bitcoin will be offset by
05:49 somebody who is saving Bitcoin and the
05:52 spenders and the savers will just cancel
05:53 each other out on a daily basis because
05:56 the only profit in Bitcoin will be
05:58 everyone’s Bitcoin going up by between
05:60 3% and 5% per year which is the rate of
06:03 human productivity growth. We get better
06:05 at making stuff and doing stuff 3% to 5%
06:08 per year. And so because Bitcoin has a
06:11 fixed supply of 21 million, the average
06:13 Bitcoin will um will increase in
06:15 purchasing power by 3% to 5% even when
06:18 it’s fully adopted worldwide. But when
06:20 that happens, the spenders and the
06:22 savers will just offset each other. And
06:23 on an average day, hundreds of billions
06:25 of dollars of Bitcoin will change hands,
06:27 but the price won’t really move because
06:29 the spenders and savers on average will
06:32 cancel each other out. But in this case,
06:33 we’re so early in the adoption cycle of
06:35 Bitcoin that they don’t always cancel
06:37 each other out. Um and so you get these
06:39 price movements. So according to James
06:41 Jack, you know, at some point the people
06:44 who are willing to sell Bitcoin at
06:46 118,000
06:47 will run out and they will run out just
06:50 like the people at 105 or 108,000 ran
06:53 out and then the price will, you know,
06:55 launch to a new higher level in his
06:58 opinion probably between 132 and 140.
07:01 And then we’ll spend a while digesting
07:02 that with to and to so that all the
07:04 people who are suddenly in a lot of
07:06 profit, you know, have time to spend
07:09 whatever they want to spend, have time
07:11 to improve the lives of them and their
07:13 families and we’ll hang out between 132
07:15 and 140. Again, these are guesses, you
07:17 know, there’s no guarantee it’ll be in
07:19 that range, but this is generally
07:21 statistically that would work. And we’ll
07:23 hang out in that range for some series
07:25 of weeks or months. And in that range
07:27 between 132 and 140, everybody’s going
07:29 to be all annoyed. Why is Bitcoin’s
07:31 price not moving? And why do we have to
07:33 sit here? And why is it going nowhere?
07:35 And why is it not exciting anymore? And
07:37 it’s just the fact that a bunch of
07:38 people are in a lot more profit at 132
07:40 to 140 than they are at 118. And some of
07:44 those people are going to want to spend
07:45 their Bitcoin. and we’re going to have
07:46 to wait for the kid at the candy store
07:48 to finish buying all the candy because
07:50 they’re feeling rich because they’re
07:51 used to having $10 and now they got $20
07:54 or now they got $30 and they that money
07:57 is burning a hole in their pocket and
07:59 they want to improve the lives of them
08:00 and their families or in the case of the
08:02 kid in the candy store, they want to buy
08:04 candy and we’re all going to have to
08:05 wait. And the faster we go to 140,000,
08:09 the longer we’re going to have to wait
08:10 for the kids in the candy store to spend
08:12 whatever they want to get done spending.
08:15 And if overnight we catapult to 165,000,
08:19 one second.
08:22 If we catapult to 165,000 or 180,000
08:25 overnight, then guess what? There’s
08:27 probably going to be a pullback because
08:29 a bunch of people who were planning on
08:31 spending some Bitcoin when it got higher
08:33 to buy a new car, put an add-on on their
08:37 house, go on a nice vacation, bunch of
08:39 those people are going to side decide to
08:41 do it at the same time. If we catapult
08:43 higher really fast and we’ll get a
08:45 pullback in price, we might shoot up to
08:47 $180,000
08:49 and then pull back fall back to
08:50 $145,000.
08:52 And why is that? Well, it’s because we
08:54 catapulted higher fast enough that there
08:57 was a bunch of people that were planning
08:59 on spending some Bitcoin that didn’t get
09:00 a chance. And now there’s a bunch of
09:02 kids in candy stores that want to go
09:04 back and spend some time in the candy
09:05 store because they uh you know, we
09:08 passed the candy store that they wanted
09:10 to spend time at. Now we got to go back
09:12 and visit it because you know that’s
09:13 where they want to be. They want to
09:15 spend a little bit. Eventually always
09:18 the market adoption of Bitcoin by the
09:21 95% of the world that doesn’t own any
09:23 Bitcoin catches up. It absorbs the
09:26 supply that’s being spent by these
09:27 people who are spending. And eventually
09:30 because Bitcoin is finite, the supply uh
09:34 the demand always outstrips the supply
09:37 over time. Sometimes it takes a while.
09:39 and the price eventually always goes up.
09:42 So even in major price corrections like
09:44 in 2022 which was caused by a bunch of
09:47 crypto stupidity blowing up and Sam
09:49 Bankman freed, you know, that resulted
09:51 in a lot of people panicking and
09:53 freaking out and selling Bitcoin and the
09:54 price, you know, declined for like a
09:57 year in a row. But eventually the
09:59 adoption of Bitcoin outstripped that
10:02 supply of panic sellers and the price
10:04 marched higher and then higher and
10:06 higher and higher until record record
10:08 highs and now it’s you know twice as
10:11 high as it ever was in 2022 at the
10:14 highest point in 22 and six times as
10:16 high as it ever was at the lowest price
10:18 in 2022 because again eventually the
10:21 demand always outstrips the supply. But
10:24 like a pig in a python, the marketplace
10:27 has to digest higher prices because
10:30 there are people that want to spend
10:31 Bitcoin those higher prices. And one day
10:34 that will be you. One day your Bitcoin
10:37 will be in so much profit that you will
10:39 be going on a nice vacation. You will be
10:41 buying a new house, a new car, building
10:43 an ad on on your house, whatever it is
10:45 you do when you’re feeling wealthy. And
10:48 other people who are new to Bitcoin will
10:50 be annoyed that some people somewhere
10:52 are spending Bitcoin. And you’ll think,
10:54 “Yeah, but I bought this Bitcoin in 2025
10:56 and here we are in 2029 and I’ve
10:59 quadrupled my money.” And you have every
11:01 right to spend some of your Bitcoin
11:03 because you’ll be deeply in profit just
11:05 like the people are in 2025 that were
11:07 buying in 2022, 2023, 2024. They’re up a
11:12 lot. And you know, that’s what they do.
11:15 That’s how humans behave. But that’s how
11:16 you will behave, you know, in the long
11:19 term. So, uh, enjoy the ride. It’s just
11:21 the way all markets work. It’s not
11:23 unique to Bitcoin. It’s the way all
11:24 investments work. They all take time to
11:27 digest new price points. It’s just part
11:29 of the journey. It’s part of the
11:30 process. And if you wait long enough,
11:32 the price always eventually goes up.
11:34 Have a great day, everyone.
