Hey guys, it's sasha bitcoin has crashed by over 20 percent in the last two days and is now trading at about 22 000, as i'm recording this video. This is 68 down from the peak of 68 000 on the 8th of november last year, and the global crypto community is in massive panic selling mode getting rid of their favorite doctor tokens for sensing, the dollar that they originally paid for them and scratching their heads. Trying to understand why a worthless jpeg of a monkey wearing a hat turns out to be worthless. Now the staunch crypto bros are digging in and pronouncing a definite, absolutely concrete return to a hundred thousand dollars for bitcoin by christmas, and the economic theory behind this prophecy is somewhat equivalent to trust me bro.

Now. The thing with bitcoin is that it tends to have big ups and downs and the kids who have plowed their entire life savings about 200 into crypto have now declared themselves to be long-term investors waiting for the next big peak, which they are certain is coming. Probably in about three and a half years time, because why shouldn't a made-up online token go up in value indefinitely at an exponential rate? What possible reason can they be for bitcoin to not be worth a hundred thousand dollars, or perhaps a million dollars or whatever the biggest number? It is that you can think of the big problem for bitcoin, and the word of crypto in general is that this crash is very different. It is very different in several different ways and for several different reasons, and there is a very real possibility.

However, unfathomable that bitcoin will not recover this time around teaching a lot of young investors an unfortunate but very important lesson. The first fundamental problem is that this is the first time in bitcoin's history that we are seeing a broad stock market crash. An overall global economy slowed down happening since bitcoin was invented. In 2009., there was a flash crash when cobras first arrived in march 2020, but it was over so quickly.

Nobody even realized what happened and did not lead to any of the typical outcomes of a sustained and painful market crash, and for the last nine years since bitcoin broke through into the mainstream. The popular accepted narrative that really doesn't get challenged by bitcoin. Investors has been a bitcoin is the perfect hedge against everything that is wrong with this outdated, really bad fiat financial system. Bitcoin, you see, is by design completely 100 immune from all the ills of traditional banking.

It is different. Those greedy old banks are run by completely dumb bankers and pinstripe suits are on their way out. The global fiat system is going to collapse, it is certain and bitcoin will ride in like a night and a white horse to save the day, because bitcoin you see is immune to inflation. Bitcoin is immune to everything.

It is a naturally deflationary currency, because there is a finite number of bitcoins that will ever be produced, and some of these will be lost along the way as well, and that must logically mean it must logically follow that the price of bitcoin will only ever go Up and it'll keep going up until everyone's a billionaire. This is just basic economics. It's a bit like the ford car. There was only a finite number of these ever made over the years and for whatever reason, some people paid over 10 000 pounds for these when they were brand new and over time the number of them has been reducing and, as a result, the price has skyrocketed To a mind, boggling 650 pounds make no mistake: there is no possible way for something that comes in a limited supply to not forever go up in value.

That is just how money works, and the slight issue that we're seeing right now is that for some completely unexpected. The reason that i and many other people totally expected bitcoin happens to be just as susceptible to overall market conditions as everything else. If anything, it is happening to be a lot more sensitive than most other things. So the moment the market died in 2020, bitcoin went and dived with it.

Instead of you know, providing a hedge but hey that happened so quickly. Nobody even noticed, and the moment now that we have a proper, sustained market crash, high inflation and economic uncertainty in the dinosaur financial system. Bitcoin goes and collapses at precisely the same time and collapses much harder than this dinosaur financial system. Crypto bros are finding out the hard way that the perfect hedge against fiat happens to completely correlate with and be entirely dependent on, fiat, which, i guess, is not the best kind of way to find this thing out a very unfortunate way to lose your 200 life Savings perhaps more worrying for the spotty 13 year olds, pretending to be investors as the relative price movements in bitcoin during this most recent price cycle.

If you look back at what the typical price movement has been for bitcoin that has sustained its indefinite ascent to the moon, it tends to go in a massive runabout every four years or so, and then falls back to a flat lower level before waiting for the Next wave of investors to flood in and then go on, another run. The first big run was in 2013 when bitcoin topped out at over twelve hundred dollars before falling back to around 230 over the next two years. And then, four years later, in 2017, bitcoin ran up all the way to nineteen thousand dollars at the end of the year, before falling back to three thousand six hundred dollars and once again, four years later, at the end of 2021, like clockwork, bitcoin went and hit 68, 000, and even if the bitcoin investor thesis is absolutely bang on. It is correct and bitcoin follows this same exact pattern as before.

It still has to fall quite some way to get to 80 down from the peak, because it is still about 50 percent higher than the 13 000 level that it has to go and fall back down to it, but as with every other speculative asset bubble in History, there comes a time when investors start to actually ask the question: why is it that everything stinks of cow poop around here? There is not an infinite number of people that are ready to plow their money into the bubble, to sustain the next rise and the one after that and so on, and so on, and eventually that inflow of new investors stops and the last two years have seen The largest inflow of retail investors that we have ever seen by some margin, including into crypto assets, in fact, probably disproportionately into crypto assets. We have had covert where people stayed at home and in many cases, spent less money, leaving more disposable income and obviously an increased level of boredom which led them to invest. In the latest fluffy dog token, we've had steamy checks that fueled, more retail investor participation than we've had ever before, and we've had the advent of free brokerage apps that let you invest in stocks and while you're at it they'll. Also, let you buy bitcoin and any other crypto in the same app just as easily, and the two big stimmy checks happen to arrive just in time to stimulate the big bitcoin price rally in 2021.

The big question is: how much did the macroeconomic situation, the huge bull run and everything that was happening over the last two years exacerbate and artificially inflate to the bitcoin price peak that we saw last year because we have been seeing cracks well before the covert boom Happened and these haven't gone anywhere, they're still there, the number of daily bitcoin transactions has been steadily declining over the last two years, while the market had one of the biggest bull runs in history and all the money was flowing in with record levels of investor participation. In the retail space, bitcoin was going to be the default payment option in day-to-day life, according to the news in 2014, and yet here we are in 2022 and has made absolutely zero inroads into being used as an actual currency. I don't know about you, but i am not seeing grannies whip out their bitcoins to buy bread and milk at the local grocery store. Perhaps this is because there was absolutely no problem whatsoever with using, i don't know, regular money and when there is no problem to solve, perhaps nobody actually needs a solution, and you can see on the chart that historically, whenever bitcoin's price fell after hitting a massive peak, It still fell to a level that was well above the previous peak or any of the points in the previous cycle, and so when the new investors were putting the money in during any point in a cycle, all they had to do was wait long enough to Be in the next cycle, when it didn't really matter which point during the next cycle you looked, you were up substantially on your investment and that stimulated the positive vibes, attracted new investors and stimulated the new wave.

Now the last peak was only just three times the size of the peak before, and that is a much smaller increase than what we've seen before the one before that was 15 times. So now the price of bitcoin has dropped to 22 000. It is now getting very, very close to the 19 000 that was back in december 2017 almost five years ago and remember if it follows the same pattern and falls by 80. It is going all the way down to about 13 000, and this is where the massive existential risk for bitcoin sits.

If this massive sell-off continues and bitcoin goes on to hit 19 000, you will have a whole bunch of retail investors who invested at the previous peak when bitcoin was all over news. Everyone was talking about it. All the money was flooding in those people will be down on their investment and they will be down on their investment over a five-year window and with all the doom and gloom out there and with the typical retail investors being about as stoic and resilient as a Goldfish, there's a high risk that those investors will start selling to cut their losses, and, if that happens, the spiral would then send the bitcoin price lower, which will engulf more of those retail investors who will be now down on their investment from perhaps six or seven Years ago, from both of the last two cycles, and they will then to go and sell and so on and so on and so on. I warned about this exact scenario playing out about a year ago, in july last year, on my channel, and here we are and to make things worse, the rest of the world of crypto is unraveling fast.

We have ponzi schemes like celsius, stealing people's money, again entirely predictable and completely expected, but for some reason, massively surprising to the people who thought that getting 20 or 30 guaranteed returns was somehow legitimate and absolutely normal. We have stable coins that were pegged to the dollar. Mysteriously disappear and not be pegged to anything with the founders taking everyone's money, and the regulators seem to be finally waking up from some kind of self-induced coma and realizing that this world of endless scams and ponzi schemes should perhaps actually be regulated, and some people really Should go to prison and this is all just getting started. We still have the big bad world of influencers.

Who will stop at nothing to earn an extra buck by pumping all of these garbage tokens to their followers? I am guessing. The net is going to start closing in at some point, probably sooner rather than later, and that net will not help bitcoin's price either. The omens here certainly do not look great if you found this video useful or, at the very least mildly entertaining. Please do me a favor and go and smash the like button for the youtube algorithm, because uh i'm gon na get the odd dislike or two from the crypto bros.

Thank you so much for watching. I really appreciate it and, as always i'll see you guys later, you.