Chapter 4 of "The Great Gatsby" is often seen as the beginning of Jay Gatsby's downfall because it reveals the shady and criminal nature of Gatsby's past. In this chapter, Nick learns from Jordan Baker about Gatsby's true history and the source of his wealth. Nick says, "I discovered that he was not only Gatsby, but he was the son of some wealthy people in the Middle West" (Fitzgerald, 61). This information challenges the image of Gatsby as a self-made man and reveals that he obtained his wealth through illegal means.
Furthermore, Gatsby's obsession with Daisy becomes more evident in this chapter, as he tells Nick about his past relationship with her and his desire to win her back. Gatsby's pursuit of Daisy becomes the driving force behind his actions, leading him to throw lavish parties and engage in criminal activities in order to attain his goal. This obsession with Daisy ultimately leads to his downfall, as he becomes consumed by his love for her and loses sight of reality.
In addition, the chapter also introduces the character of Meyer Wolfsheim, who is rumored to be involved in organized crime. This further highlights the criminal nature of Gatsby's world and serves as a warning of the dangers of getting involved with such people.
Overall, chapter 4 marks the beginning of Gatsby's downfall by revealing the darker aspects of his past and setting the stage for his obsession with Daisy, which ultimately leads to his tragic end.