Bitcoin Market Analysis: Reasons for Current Price Decline

Bitcoin's future hinges on institutional adoption and market stability amidst current volatility and macroeconomic challenges.

### Understanding the Current Bitcoin Market Decline: Key Factors and Future Outlook
* 📉  Bitcoin currently represents **0.1% of global capital**, with forecasts suggesting it could rise to **7%** and potentially reach **$13 million in value** over the next 21 years, despite recent market downturns.
* 🔑  A significant issue affecting Bitcoin's security was highlighted when a tweet revealed that **every Bitcoin seed word had been leaked**, causing panic among users, even though the actual risk of theft remains **extremely low** due to the vast number of possible combinations.
* 💻  The decline in Bitcoin's price is influenced by broader market trends, particularly the recent struggles of tech stocks, notably Nvidia, which **lost over $400 billion in market cap**, impacting both traditional and crypto markets.
* 💴  Japan's decision to raise interest rates has also contributed to market uncertainty, as it **raises borrowing costs for institutions** that have relied on low rates to invest in assets like **Bitcoin**.
* 📊  Historical data indicates that September is typically a poor month for Bitcoin, with a **median loss of 5.1%**, prompting investors to **sell early to avoid further losses**, as they anticipate October's potential recovery.
* 🔄  The Bitcoin halving cycle, which traditionally influences **price increases**, may not hold the same predictive power as in the past, with some analysts suggesting that **macroeconomic factors** played a larger role in previous price surges.
* 📉  A lack of **compelling narratives** surrounding Bitcoin has led to **decreased investor interest**, as the market lacks the **excitement that previously drove its price upward**, similar to how a TV show can **lose viewers without engaging plot twists**.
* 💸  Despite these challenges, the speaker maintains a **long-term perspective** on Bitcoin's potential, advocating for **continued investment and diversification** while remaining **patient amid short-term volatility**.

I think clearly we're all waiting for big Banks, bulge bracket Banks, to start the custody and hold Bitcoin. That'll be the third big shoe to drop. You know, Bitcoin's 0.1% of the capital in the world right now. I think it's going to go to 7% of the capital, 7%. My long-term forecast is this is going to go to 13 million over 21 years. But before we get to those price points, there's a couple of things we have to fix, like the fact that every single Bitcoin seed word has just been leaked. It's a tweet I saw from an ex-user VI who posted that every single word that makes up a huge portion of Bitcoin wallets. And every time someone posts that screenshot and tweets it out, people lose their minds. In all reality, Bitcoin is safe, but there are seven specific reasons I want to share with you in today's video why the rest of the market, including Bitcoin, is going down. But first, I want to show you something that's really cool and

nerdy. A lot of Bitcoin wallets use a private key that's made up of 12 to 24 words, and that's called a seed phrase. I have a booklet right here which shows every single one of these words. You can also Google to see that there's 2,048 possible words. Each word is unique, and the first four letters of each word are different, and no two words share the same four letters with any other words on this list. Now, hypothetically speaking, if someone could guess 12 words out of this booklet of 2,048 in the right order, they could get access to your Bitcoin wallet. And I don't know about you, but to me, that seems kind of doable. But let me show you what the math says the odds of doing that actually are. Because the math says there are 5.44 * 10^39 possible combinations. That's a number so big that assuming we had a supercomputer that could guess one billion combinations per second, which is something we cannot do just yet, it would still take that computer

10073 sextillion years to guess one of them. That's 12.5 billion times longer than the current age of the observable universe, which is only about 13.8 billion years. And since my brain is really smooth and doesn't understand what any of that means, another way to think about this is you are more likely to get struck by lightning every single day of your life and then some. But it gets even crazier because compared to winning the lottery, which is 1 in 292 million, which when divided into 5.44 * 10 39th means you are 1.86 trillion trillion trillion times more likely to win the lottery. In fact, you're more likely to win the Powerball jackpot every single week for the next 1 billion years than you are to guessing 12 words in the right order. So the numbers are so big that they're hard to imagine, but what's crazy is that most Bitcoin wallets use 24 words, and that's a number that is so unimaginably big.

that my tiny human brain couldn't come up with any analogy that would make any sense, and none of this is secret knowledge. But I think most people probably didn't know that whatever the title of this video, if it feels like clickbait, I wanted to do that as a way to prove that when it comes to Bitcoin, people freak out because the average person doesn't fully understand how it actually works. And because of that, it makes them more susceptible to scary headlines, news stories, and price drops, which is also why the Bitcoin fear and greed index is showing extreme fear in the market right now. People are confused why Bitcoin is crashing and what's happening to the market right now. So if you like that super nerdy analogy and you want to hear more context, I have seven more explanations I want to share with you about why everyone is losing money in the market. And hopefully, by the end of this video, we can all take a deep breath, calm down, smash the like button, and carry on. So with that said, let's get

into it. Hi, my name is Andre J. Hope you're doing well. Come for the finance and stay for the Bitcoin. So, there's seven major reasons why the market has gone down, and reason number one is macroeconomics. What we're seeing isn't just happening to Bitcoin; it's happening across both crypto and traditional markets, and a big part of that is because of tech stocks. Now, what's important here is that the NASDAQ, which is the index that tracks the top 100 tech stocks, has really suffered lately, and that's because Nvidia specifically took a huge hit, losing hundreds of billions of dollars in market cap, which created a ripple effect throughout both the stock market and crypto. So, this is not just a crypto problem because the tech sector is so closely linked to Bitcoin in the overall market. The selloff in one had a knock-on effect on the other, kind of like a row of dominoes. Now, reason number two the markets are really scared is because of Japan's carry trade. Now, I made an entire video

about this you can watch somewhere up here, but this is a pretty big deal because for decades, Japan was how countries and institutions borrowed cheap money. It didn't matter if US interest rates were high as long as a company could borrow somewhere else, and big financial institutions have been borrowing money at Japan's extremely low or even negative interest rate, and then they were investing that cheap money into places where they could make more money, things like US stocks, bonds, and even crypto. And the Bank of Japan kept rates near zero to encourage borrowing, but recently Japan announced that they're raising interest rates, which is scaring the market. And that's because when Japan raises interest rates, it makes those loans more expensive, which has a ripple effect because as the Yen strengthens with a higher rate, the value of the dollar goes down, especially as US interest rates are rumored to go down this month. And that's another video you can watch somewhere up here that explains all of that. But basically, because these institutions will eventually have higher borrowing costs, they have to unwind or sell their

assets to cover their debt, which includes US stocks and even Bitcoin. Now, I know all of that sounds super confusing, so just imagine borrowing money for a car at a super low interest rate, and suddenly the loan costs more, so you have to sell the car to cover your payments. That's essentially what's happening, but on a Global Financial level. Reason number three, check out this graph. That is not Bitcoin, that's Nvidia. And what you have to understand about Nvidia right now is that it's The Golden Child of AI. If Nvidia goes down, it drags the rest of the stock market down with it because AI is the big story that investors are relying on to make them money in the near future. But Nvidia also just lost over $400 billion in market cap, and that was not a normal drop. In fact, it was the biggest single-day Market loss in the company's history. And at first, people were really confused because there wasn't an obvious reason for why it happened. But then now, the Department of Justice has subpoenaed

Nvidia, as it continues to investigate claims that the chipmaker violated antitrust laws, rumors came out that the Department of Justice issued a subpoena to Nvidia, investigating them for potential antitrust violations. Antitrust laws were designed to prevent companies from forming a monopoly on the market. Now, Nvidia denied getting the subpoena, but news of this investigation still triggered panic selling from investors. But the real problem with Nvidia is Nvidia's success right now. If you've ever seen statistics on how many millionaires Nvidia has made, it's going to blow your mind. An employee survey came out about how rich Nvidia employees are, and the survey reported that 76% of them, in other words, three out of four workers at the company, are millionaires. But crazier still is that at least a third of their employees have a net worth of more than $20 million. So think about the economics of this company for just a second. When you're that wealthy, you can just retire, and you don't need to put up with your boss and your deadlines, and that's the

worry is that maybe Nvidia employees are potentially less motivated to work right now because they can just sell their stocks, coast to retirement, quit their jobs, and just become extremely wealthy. So, this recent sell-off hit the tech sector really hard, and since companies like Facebook, Google, Tesla, and Microsoft are all closely tied to Tech and this story of AI and how big it's going to be, their stocks went down too. And this indirectly affects the crypto markets, including Bitcoin. Now, reason number four for the prices going down is that August and September are known to be some of the worst months for investors, credit to Allie charts for this one. But check this out. This right here is the historical performance of Bitcoin. We are in September, and you can see that it's one of the worst months with a median loss of about 5.1%. Second only to August, which had a median loss of around 8%. So, right now, history is kind of repeating, and what's really interesting, though, is that this coming month in October is

supposed to be bitcoin's best month on average. So again, history could repeat itself, and we could see Bitcoin go up substantially sometime in October. The point though is that when investors think there's going to be a bad month, like the data shows, they tend to sell early to avoid losses later in the month. And that brings me to reason number five, the Bitcoin having cycle. Because every 4 years, the supply of new Bitcoins entering the market gets cut in half. And the thinking has always been that as supply goes down and demand stays the same or increases, that means the price should go up as well. And this has been true in the past. Bitcoin has seen higher highs after having events take place. But some experts and analysts are also saying that maybe this time is different, and they could be right. Maybe the four-year having cycle doesn't have the same influence as it used to. And according to a report from Outlier Ventures, the impact of Bitcoin's havs might have diminished. And one theory while Bitcoin went up so much after the

2020 having was less about the having itself and more about the macro environment, specifically the huge influx of money from stimulus packages. That's when trillions of dollars were printed by governments around the world to prop up their economies, and that played a much bigger role in boosting Bitcoin's price than the having did. And that's why some people now argue that the having cycle might not be as reliable at predicting price increases, especially because now everyone is expecting Bitcoin to go up. So, what ends up happening instead is investors buy Bitcoin before the having, which means Bitcoin's price could have already peaked before this latest having took place. Now, that theory could be completely wrong, and we haven't seen this having's peak just yet, but it makes sense that Bitcoin could have already potentially peaked because everyone bought it expecting it to go up. Reason number six why prices are going down right now is because Bitcoin does not really have an exciting story to get investors buying. Remember, it's all about the story. This happens to stocks all the

time we've seen how powerful stories like self-driving and robots with Tesla will drive the stock to thousands of dollars, and how AI becoming the leading technology with Nvidia will make investors super rich. And all assets function in this way; they benefit from a good story. Now, in previous cycles, bitcoin's rise was driven by big stories like it was going to be the future of banking, digital gold, or in 2024, the securitization of Bitcoin with the approval of ETFs. But right now, there's not a lot of buzz around Bitcoin, and without a strong story driving that adoption or innovation, investors are going to lose interest, especially when the price is going down. It's the same as a TV show that starts out really strong with great episodes but then loses the momentum when there's no new plot twist to keep you hooked. Basically, the House of the Dragon right now, the second season was just a disappointment, and I don't know if I'll get back into it, but bitcoin's market feels a little bit like

that right now with nothing groundbreaking to rally around. And reason number seven is, of course, ETF outflows. Remember, outflows refer to money leaving assets, and Bitcoin ETF saw some huge outflows recently. And that further contributes to the market panic. And these ETFs, remember, hold a significant amount of Bitcoin. And when investors pull their money out, that forces those funds to sell off the assets, including the Bitcoin, which moves the price downwards even more. But when you combine all of that with the tech sell-offs and macroeconomic pressures from Japan's rising interest rates, and even uncertainty about US elections and who the next president is going to be and what they'll do and what the FED will do with interest rates, and that's why everything, including Bitcoin's price, is going down. Now, if you made it this far into the video, I'm going to try to tie this all together and show you what I'm doing and what I think about it. And I think it's really important to remember that Bitcoin has been here before. History shows Bitcoin's price.

moves in cycles. We've seen bear markets and corrections, but for context right now, we're right here. This is just a small bump in the road, and it's possible that it could get worse. So, a key part of this is to remember context, and the second important thing to remember is to keep a perspective. The perspective I have is a long-term view. Bitcoin has continued to go up year after year, whether it's gold, real estate, or the S&P 500. Bitcoin has shown incredible growth over time, and even though the four-year halving cycle might not have the same pull it used to, fundamentally as a technology, nothing is different. And I like to think if Warren Buffett was a buyer of Bitcoin, he'd be saying something like, Well, if you liked it at 70,000, you should love it at 30,000. Unfortunately, he's like, It's our poison, but I digress. That's why I've been buying more and more, and not just dollar-cost averaging, but in some cases lump-sum investing, because I think and I

could be completely wrong, but I think Bitcoin will outperform the stock market and real estate over the next 10 years. But I'm also still investing in the stock market, and I'm going to reinvest all my dividends because I want to stay diversified as much as possible and become... I'm not a genius because I don't know what I don't know. I think diversification is always a good thing to practice. For me, the key is not to get caught up in the short-term volatility and the scary headlines that will continue to come up week after week, and to recognize that being patient is really important when dealing with a long-term perspective. Now, I'm going to do a portfolio update very soon and show you the specifics, so if you're into that, subscribe and hit the bell button for future uploads. But as always, I hope you have a wonderful rest of your day. Smash the like button, subscribe if you haven't already. I'd love to see you back here next week. I'll see you soon. Bye-bye.

BREAKING: Michael Saylor Predicts $13 Million Per Bitcoin

I will NEVER contact you for business or promotions (even if it comes from my legit email). I will not use IG, Telegram, or whatsapp to reach out - please ignore and report those accounts. 

I'm like Harry Potter - if he was a financial minimalist, did card tricks and worried about money. Biz inquiries: andrei@majikh.com


Andrei Jikh

The Future of Bitcoin and Wallet Security

Big banks are expected to start custodying Bitcoin, potentially increasing its capital share from 0.

1% to 7% and driving its price to $13 million over 21 years.

The recent leak of Bitcoin seed words has raised concerns, but the odds of guessing the correct 12-word combination are astronomically low.

With 24-word seed phrases being even more common, the chances of successfully accessing a Bitcoin wallet are virtually impossible.

The video's clickbait title aims to highlight the confusion surrounding Bitcoin's recent crash, which is causing widespread fear in the market.

The decline is not just a crypto issue; it's linked to the struggling tech sector, particularly the NASDAQ and Nvidia's significant loss.

Additionally, Japan's decision to raise interest rates is causing ripple effects in global markets, making loans more expensive and impacting institutions that have been borrowing cheap money.

The Global Financial Impact of Nvidia's Downfall

Nvidia's recent $400 billion loss in market cap has caused panic selling and is dragging down the entire stock market, as the company's success is closely tied to AI's future.

The Department of Justice's investigation into Nvidia for potential antitrust violations has added to the turmoil, leading to concerns about employee motivation and a mass exodus of wealthy workers.

The historical performance of August and September has also contributed to the overall market downturn, with Bitcoin experiencing its worst months during this period.

Factors Influencing Bitcoin's Price Fluctuations

Bitcoin historically sees price increases in October, but early selling by investors anticipating a bad month can impact its performance.

The four-year halving cycle, which reduces the supply of new Bitcoins, has previously correlated with price increases, but its influence may be diminishing.

The macroeconomic environment and widespread money printing from stimulus packages may have played a larger role in Bitcoin's price surge after the 2020 halving, leading to skepticism about the reliability of the halving cycle in predicting future price increases.

Bitcoin's rise has historically been driven by compelling stories, but currently, there is a lack of buzz and innovation, leading to decreased investor interest.

The recent outflows from Bitcoin ETFs have further contributed to market panic and downward price pressure.

Additionally, macroeconomic factors and uncertainty surrounding US elections and interest rates are impacting Bitcoin's price negatively.

Bitcoin's market has experienced bear markets and corrections, but its long-term growth remains strong.

The speaker believes Bitcoin will outperform the stock market and real estate over the next 10 years and is actively buying more.

Diversification and patience are emphasized as key strategies for navigating short-term volatility.