How do we know that John 3:16 doesn't mean Christ died for everyone?

In understanding John 3:16, it is crucial to consider its context. The verse is a part of a conversation between Jesus and Nicodemus, a Jewish leader. The emphasis is on belief as the means to obtain eternal life, not on a universal application of Christ's death. The assertion that Christ died for everyone conflicts with the sovereign grace perspective, which maintains that Christ’s sacrifice is effective for the elect—those who are called to believe. The phrase 'God so loved the world' does not denote that every individual is covered by His grace; rather, it signifies that His grace extends beyond the Jewish nation to include believers from all peoples, thus validating the continuation of faith's essential role in salvation.