A new ultra-bullish Bitcoin price model is making the rounds online, and its creator claims his predictions are based on math and science.
Conceived as early as 2019, the “Bitcoin power law” attempts to map Bitcoin’s long-term price rise on a log-log scale, meaning that both price and time are on the y-axis and x-axis, respectively. means to scale exponentially along the axis.
result? It’s a nearly straight, upward-sloping chart that allows its proponents to capture Bitcoin’s high and low ranges with “amazing” accuracy.
“When we try to understand data, we always like it to be linear,” Giovanni Santostasi, a former physics professor at McNeese State University, told YouTuber Andrei Zyk last month. In an interview, he talked about his model.
According to Oxford Dictionaries, a power law is “a relationship between two quantities such that one is proportional to a fixed power of the other.” This relationship should occur regardless of the initial sizes of these quantities. That is, it scales linearly to infinity.
“There are many relationships in nature that are linear like this,” the astrophysicist added, citing Kepler’s laws of planetary motion as an example. This law specifies a power law relationship that uses every planet’s distance from the sun to calculate the time it takes for that planet to reliably orbit the sun.
Power laws are found in a huge number of seemingly independent places. They’ve even appeared in the financial realm, predicting returns on risky venture capital investments, the average wait time for a stock to change direction, and now even the price of Bitcoin.
“Many people didn’t believe me and said the past doesn’t predict the future,” Santostasi wrote in a Reddit post last month, reconsidering his long-held model. “Well, five years later, we see that BTC continues to behave in a power law manner with similar indices.”
Algebraically, the BTC power law is expressed as: Estimated Price = A * (Days Since GB)^n.
GB refers to the Bitcoin genesis block mined on January 3, 2009. A equals 10^-17 and n equals 5.8.
According to this model, based on today’s date, Bitcoin’s price should be $64,564, not far from what short-term analysts expect it to be in a few months.
Santostasi said his model predicts Bitcoin will reach the “peak” of the cycle. $210,000 In January 2026, it crashed to the “bottom” later that year. $60,000. According to him, in the short term, the price of Bitcoin will not fall below $35,000 and should reach $1 million by 2033.
Certainly, there is no guarantee that the price of Bitcoin will follow this or any other predictive model. Unsurprisingly, this model gives investors unreasonable expectations for BTC and may ultimately fail, similar to the now widely criticized PlanB stock-to-flow model popularized in 2021. Some people have expressed concern that this may not be the case.
Santostasi respects certain elements of the stock-to-flow model, but primarily Criticize This is because we predict an indefinite exponential growth in the price of Bitcoin. Instead, the physicist likens Bitcoin’s growth to the growth of a city, echoing Bitcoin billionaire Michael Saylor’s description of Bitcoin as a “shining city in cyberspace.”
“BTC has no S adoption curve,” he says. I have written he tweeted on Tuesday, adding that “power laws govern urban growth.”
“We are attracted to the idea that it will grow like a city and become a more stable and reliable model and asset than a get-rich-quick scheme,” he added.
Edited by Andrew Hayward