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welcome to money is freedom

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a podcast

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exploring how finance and freedom connect in our lives

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created from thoughtful research

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and narrated by Notebook LM AI

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this series brings you clear

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meaningful insights into finance and beyond

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in Episode 9 we delve into

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the enduring nature of Bitcoin's four year cycle

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even amidst its growing mainstream adoption

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we'll explore how bitcoins

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having events occurring approximately every four years

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and reducing mining rewards by half

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create supply

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constraints that significantly influence its price

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dynamics despite the surge in institutional investments

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and the approval of Bitcoin etfs

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these fundamental supply

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demand mechanics continue to play a pivotal role

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in Bitcoin's market behavior

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join us as we analyze the interplay between bitcoins

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intrinsic economic principles

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and external market factors

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shedding light on why its cyclical patterns persist

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welcome to the deep dive today

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uh today

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we're tackling a question

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I think a lot of our listeners are wrestling with

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it's this whole thing with Bitcoin

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why does it seem to have this uh

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this unshakeable four year price cycle

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you know you think

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with all this talk about Bitcoin going mainstream

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things would be more stable by now

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but it's like this heartbeat that just keeps on ticking

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yeah it's a fascinating puzzle for sure

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it really is so

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we're gonna dig into this article called

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why Bitcoin will maintain its four year cycle

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despite mainstream adoption

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see if we can crack the code together

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sounds good it really is fascinating

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like you have this surge in mainstream adoption right

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things like Bitcoin ETS

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those are making it easier than ever

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for just the average person to uh

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to get involved right

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but on the other hand

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you have this underlying technology

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yeah and it's got its own set of rules

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and those rules while they seem to be

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kind of dictating how the market behaves

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yeah it's like

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this underlying heartbeat that I was talking about

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just keeps on ticking

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no matter what's happening on the surface

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so at the heart of it all is this thing called having

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can you break that down for us

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absolutely so imagine bitcoin as like a story

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a constantly evolving story

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every four years there's a major plot twist okay

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and that twist is the having

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basically the reward for mining new Bitcoin

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it gets cut cut in half

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hmm and this isn't just some random event

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this is programmed right into the code of Bitcoin

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it's a fundamental rule it can't be changed

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so it's like a built in scarcity mechanism yeah

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like less Bitcoin is coming into existence

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hmm but demand keeps growing

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especially when the price starts going up

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so what happens there what's the net effect

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well think of it this way

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if the reward for mining Bitcoin drops suddenly

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then the miners have to sell their bitcoin

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at a higher price just to break even

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oh I see

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their operating costs essentially double overnight

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so they have to adjust their strategy

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if they wanna stay profitable

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makes total sense just basic supplying demand

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but playing out in a very unique way

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now let's talk about those ETS again

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we saw the first ones approved in 2024

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it was like opening the floodgates

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for this whole new wave of investors right

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and a lot of people thought this was it

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this was the thing that would finally break the cycle

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yeah a lot of folks thought that

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and the initial impact was undeniable

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I mean we saw a price jump early in the year

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it was fueled by all that excitement around etfs right

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but then something interesting happened

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the price settled back into a pattern

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that looked a lot like previous cycles

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wow so it was like this momentary blip

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and then right back to the same pattern

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so does that mean these big

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institutional investors

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aren't really calling the shots

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that's a great question I mean

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everyone assumes they bring more stability right

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they're not as prone to those knee jerk reactions

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exactly like

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someone checking the price on their phone

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every five minutes exactly

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but it's important to remember that even with etfs

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a lot of Bitcoin is still held by uh

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by individuals like just regular people really

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yeah a 2024 survey

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actually found that 55% of Bitcoin holders in the US

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are individuals not institutions

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wow

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so even with all this talk of Wall Street taking over

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it's still mostly driven by individual investors

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yeah pretty much

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so people like you and me

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exactly and that's key to understanding why this four

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year cycle persists because individuals well

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they're more influenced by new cycles

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you know social media hype

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fear of missing out all that makes sense

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they're quicker to buy or sell based on sentiment

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yeah and that can create those big

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swings that we see in the price

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so the psychology of the individual investor

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is almost as important

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as the technical aspects of Bitcoin itself

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I think you're absolutely right

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in fact you could even argue that

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those psychological factors are

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kind of amplified by having

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okay now I'm intrigued

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tell me more so think about it

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when having happens it creates the sense of scarcity

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this

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feeling that Bitcoin is becoming even more valuable

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and this this naturally triggers FOMO

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that fear of mischout especially among those who

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you know

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don't really have a deep understanding of the long term

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implications oh

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so it's like a self evolving prophecy almost

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yeah the having creates this narrative of scarcity

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which drives up demand

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which pushes the price even higher

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exactly and then on the flip side

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when the price starts to drop

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you have the opposite effect

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panic selling people see their investment losing value

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and they just wanna get out

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which drives the price down even further

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so it's this constant push and pull between FOMO

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and panic all happening against the backdrop of having

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uh huh which just keeps repeating every four years

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exactly like this

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built in volatility that's almost impossible to escape

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even with more institutional money coming in

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so for our listener

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who's maybe just

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starting to dip their toes into the world of Bitcoin

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was the key takeaway here

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what do they need to understand about these cycles

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well first and foremost

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they need to understand that

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volatility is inherent to Bitcoin

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it's baked into the code don't expect a smooth ride

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even with etfs in the picture

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so those dramatic upswings and downswings

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those are probably gonna continue

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even as Bitcoin becomes more widely adopted

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yes most likely

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that's why it's crucial to have a long term perspective

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you can't just look at short term price fluctuations

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and make emotional decisions based on

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you know FOMO or panic

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you need to understand the underlying forces

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driving those fluctuations

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and those forces

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are deeply connected to human psychology

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so it's like

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you need to be a student of both the technology

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and the human behavior that surrounds it

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which brings us to another fascinating

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layer of this whole cycle discussion

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the impact of broader economic trends

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because it's not just about

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what's happening within the Bitcoin ecosystem right

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it's not there are these larger forces at play

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that can influence how bitcoin behaves

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absolutely and in fact

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when we start looking at things like monetary policy

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we see some really interesting correlations with

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Bitcoin's cycles

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yeah it's fascinating

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bitcoin often reacts to what central banks are doing

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with their monetary policy

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things like interest rates and

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and quantitative easing

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you mean those big levers they pull

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yeah that can make the entire economies speed up

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or slow down I have to admit

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those things can feel pretty abstract most people

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so how do they actually affect bitcoin

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okay so think of it this way

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when central banks are pumping money into the economy

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that's quantitative easing or Q E

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it's like

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they're creating this rising tie that lifts all boats

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including bitcoin

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bitcoin is often seen as a hedge against inflation

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a way to protect your purchasing power

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when the value of traditional currencies is going down

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so in those like easy money periods

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bitcoin tends to thrive

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but what happens when the central banks switch gears

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and start tightening things up

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ah that's where it gets interesting

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when we move into a period of quantitative tightening

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or QT

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it's like someone's hitting the brakes on the economy

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okay investors get more risk ofverse

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they pull back from those

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from those speculative investments

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and bitcoin often takes a hit

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so you're saying these macroeconomic trends

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they can actually amplify

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or dampen the effects of having

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so it's not just about the built in scarcity of Bitcoin

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it's also about the overall economic context

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exactly it's like these two forces are intertwined

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creating this

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this complex dance that drives Bitcoin's price cycles

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okay and that's why

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it's so important for investors to understand

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both the technical aspects of Bitcoin

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and the macroeconomic environment okay

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this is started to paint a clearer picture for me

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so we have

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having this recurring event that creates scarcity

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and that triggers those predictable

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psychological responses and then

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we have these broader economic trends

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that can act like a tailwind

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or a headwind

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depending on what the central banks are doing

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yes but there's another piece of this puzzle

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we haven't really touched on yet

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the different types of bitcoin holders

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and how their actions influence the market right

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because

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it's not just a simple dichotomy of institutions

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versus individuals within those categories

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you have a spectrum of investors

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with different time horizons

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and different strategies

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so can you elaborate on that a bit sure

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you have those short term holders

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they're often driven by new cycles

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social media hype that FOMO we talked about earlier

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they're buying and selling

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based on short term price movements right

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trying to ride the waves make a quick profit

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oh so

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they're the ones who are most susceptible

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to those emotional swings

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that fear and greed

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the things that can amplify the cycle's volatility

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exactly and then you have long term holders

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these are the folks

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who believe in Bitcoin's long term potential

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they're less phased by those

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by those short term fluctuations right

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they might even see those dips as buying opportunities

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a chance to accumulate more bitcoin at a lower price

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so their actions would actually

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have a stabilizing effect on the market

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to some extent yes

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they're less likely to panic sell during a downturn

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and their study

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accumulation can help provide a floor for the price

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but it's important to remember

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that even long term holders

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aren't immune to market psychology

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that's a good point

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even if you believe in the technology

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it's hard not to be influenced by those price swings

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right especially

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when you see your investment going up or down by

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you know significant amounts

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absolutely and that's why it's crucial to have a clear

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understanding of your own investment goals

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and risk tolerance you know

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are you in it for the long haul

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are you comfortable with volatility

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these are questions you need to ask yourself

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before jumping into the world of Bitcoin

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it sounds like knowledge is truly power in this market

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even more so than in traditional financial markets

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I would definitely agree because with Bitcoin

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you're not just investing in a company or a stock

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you're investing in a technology

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a protocol an idea

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right and to truly understand that investment well

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you need to go beyond the price charts

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and really delve into the underlying mechanics

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the psychology of the market

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and the broader economic forces at play

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so for our listener

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who's trying to make sense of all this

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what are some key things

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they should be paying attention to

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what are the signals amidst all the noise

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well I think

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the most important thing is to focus on

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the fundamentals of Bitcoin

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the things that genuinely impact its value

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not just the hype or the speculation

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but the actual real world usage and growth

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like what specifically things like adoption rates

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how many merchants are accepting Bitcoin as payment

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how is that growing overtime

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network security is crucial

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how secure is the blockchain against attacks

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has it proven to be resilient

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and then there's development activity

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how many developers

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are building on the Bitcoin blockchain

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what kind of innovation is happening

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so it's about looking beyond the price

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and really understanding whether

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the technology is actually delivering on its promises

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exactly and then there's the macroeconomic layer

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we talked about earlier things like interest rates

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inflation quantitative easing versus tightening

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these are all factors that can influence

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bitcoin's price regardless of its underlying

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technological advancements

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so we've covered the technical role the psychological

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the microeconomic

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is there anything else investors need to be aware of

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when navigating these cycles

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it feels like we're looking at this

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a multi layered puzzle with Bitcoin at the center

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and all these different forces pulling at it

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yeah

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and there's one more layer I think we should touch on

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it's the the broader societal trends

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these can really influence how bitcoin is

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perceived and valued okay

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now you got me really curious

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what kind of trends are we talking about here

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we'll think about things like technological innovation

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geopolitical shifts even changing demographics

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for example as younger generations enter the market

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you know

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the ones who are more comfortable with digital assets

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that could create a whole new wave of adoption

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and investment it's like Bitcoin is this mirror

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reflecting all the ways our world is changing

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the more uncertainty there is

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in the traditional financial system

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the more appealing something like Bitcoin becomes

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exactly or let's say there's a major geopolitical event

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something that shakes

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people's confidence in traditional currencies

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well Bitcoin could be seen as a safe haven

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because of its decentralized nature

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this is so much more nuanced than just

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you know looking at price charts

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and trying to guess where the market's going

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it feels like

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understanding bitcoin requires you to understand

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the world itself I think that's a great way to put it

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bitcoin exists within this complex

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web of interconnected systems

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and trends the more you understand those connections

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the better

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equipped you'll be to make informed decisions

380
00:13:13,966 --> 00:13:16,433
okay so let's recap everything we've Learned today

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we started by exploring the

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having this fundamental event that creates scarcity

383
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and kind of sets the stage for those four year cycles

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right then we talked about the psychological factors

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how those cycles trigger feelings of FOMO and panic

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especially among those individual investors

387
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exactly

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and then we talked about how macro economic trends

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things like central bank policies

390
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can really speed up or slow down the price of Bitcoin

391
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right like a tailwind or a headwind

392
00:13:42,866 --> 00:13:43,733
yeah exactly

393
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we also touched on

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the different types of bitcoin holders

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short term versus long term

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and how their actions can either add to

397
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or reduce the market volatility

398
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right and how those different

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groups respond to those psychological factors

400
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yeah for sure

401
00:13:57,300 --> 00:14:00,766
and finally we explored those larger societal trends

402
00:14:00,900 --> 00:14:02,666
things like technological innovation

403
00:14:02,666 --> 00:14:05,266
geopolitical shifts changing demographics

404
00:14:05,266 --> 00:14:06,500
the things that can really shape

405
00:14:06,500 --> 00:14:08,566
how Bitcoin is perceived and valued right

406
00:14:08,566 --> 00:14:09,833
it's important to remember that

407
00:14:09,833 --> 00:14:11,566
all of these factors are interconnected

408
00:14:11,566 --> 00:14:12,933
they don't operate in isolation

409
00:14:12,933 --> 00:14:14,866
they all influence each other

410
00:14:15,066 --> 00:14:17,500
and that creates a really complex and dynamic system

411
00:14:17,500 --> 00:14:19,333
that can be really hard to predict

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00:14:19,433 --> 00:14:21,633
but even though we can't predict the future

413
00:14:22,100 --> 00:14:24,066
understanding these forces can help investors

414
00:14:24,066 --> 00:14:25,600
makes more informed decisions

415
00:14:25,733 --> 00:14:27,400
manage risk more effectively

416
00:14:27,733 --> 00:14:30,833
and hopefully avoid some of those emotional pitfalls

417
00:14:30,933 --> 00:14:32,466
that can lead to bad outcomes

418
00:14:32,500 --> 00:14:34,366
absolutely knowledge is power

419
00:14:34,366 --> 00:14:36,133
especially in the world of Bitcoin

420
00:14:36,133 --> 00:14:38,266
which can feel really opaque

421
00:14:38,266 --> 00:14:40,133
and intimidating to newcomers

422
00:14:40,300 --> 00:14:42,166
so if our listener wants to keep learning about

423
00:14:42,166 --> 00:14:44,533
all of this where would you suggest they go

424
00:14:44,566 --> 00:14:46,400
well the article we discussed today

425
00:14:46,466 --> 00:14:48,933
why Bitcoin will maintain its four year cycle

426
00:14:48,933 --> 00:14:50,666
despite mainstream adoption

427
00:14:50,666 --> 00:14:52,100
that's a great starting point

428
00:14:52,100 --> 00:14:53,933
it's written by chaos of money

429
00:14:54,300 --> 00:14:55,933
and they actually have a great podcast too

430
00:14:55,933 --> 00:14:58,566
they delve into all of these topics in even more depth

431
00:14:58,566 --> 00:15:00,133
I second that recommendation

432
00:15:00,133 --> 00:15:01,966
chaos of money is a must listen

433
00:15:01,966 --> 00:15:02,633
for anyone

434
00:15:02,633 --> 00:15:04,800
who wants to understand the future of finance

435
00:15:04,900 --> 00:15:07,366
not just Bitcoin but the whole landscape

436
00:15:07,366 --> 00:15:10,066
and remember the key is to stay curious

437
00:15:10,066 --> 00:15:12,566
keep learning and never stop questioning

438
00:15:12,566 --> 00:15:14,700
the world of Bitcoin is constantly evolving

439
00:15:14,700 --> 00:15:16,266
so the more you understand

440
00:15:16,433 --> 00:15:18,566
the better you'll be able to navigate the challenges

441
00:15:18,566 --> 00:15:21,166
and the opportunities that lie ahead

442
00:15:21,166 --> 00:15:22,833
thanks for joining us for this deep dive

443
00:15:22,833 --> 00:15:22,966
into

444
00:15:22,966 --> 00:15:25,633
the fascinating world of Bitcoin's four year cycle

445
00:15:25,700 --> 00:15:26,733
we hope this episode is

446
00:15:26,733 --> 00:15:28,033
giving you a better understanding of

447
00:15:28,033 --> 00:15:30,133
all the forces at play and empowered

448
00:15:30,133 --> 00:15:32,633
you to make more informed decisions about Bitcoin

449
00:15:32,866 --> 00:15:36,533
until next time keep those brains engaged and remember

450
00:15:36,533 --> 00:15:37,733
knowledge is power