Only 4 million in 16 years? Way too low. Try 16 months
Discussion
$4M is what one would expect if they expected past to predict future. You do this by linearizing bitcoin price time curve by taking log of price and log of time…then draw that straight line a little longer and undo the logs. I don’t think calling this price way too low to be reasonable. It’s literally extrapolating linearly.
https://charts.bitbo.io/long-term-power-law/
If your investment hypothesis relies upon unprecedented bitcoin price rise, you might consider your risk tolerance because I doubt you’ll do better than the past. And if you want to extrapolate, I’d encourage you to transform data to allow you to do a linear extrapolation rather than following some other curve.
In the past there was such a thing as second bests. Now we live in a world with no second best. Bitcoin’s supieriority was not well understood in all its history. Any future price predictions based on price levels during a time when Bitcoin was poorly understood by 99%+ of ppl is not wise imho.
Very true. This is exactly my point. My calculations of fair present value $700K-1.4M would be what one would expect if everyone accepted Bitcoin’s future price equaling model predicted price…I’m answering the question would be the max they’d be willing to pay today for bitcoin? This would make bitcoin price break the model and future forecasts couldn’t use the model anymore.
It’s also not an “investment hypothesis” — its accepting reality
The future isn’t reality, by definition reality can only be known in the present.
If someone needs $20M bitcoin in 16 years to make their investment pay off, I’d argue against making this investment. I don’t think it’ll happen.
As it is, a $4M bitcoin in 16 years is an average annual rate of return just shy of 30%. That’s Bernie Madoff Ponzi scheme territory. That’s way better than the vast majority of investment ever, but it does pale in comparison to early bitcoin.
From 2010 to now, bitcoin price has gone from about 10¢ to about $100,000, a 1 million time increase. That’s roughly an ARR of 137% over 16 years. This won’t be repeated the next 16 years.
Ok bro lmao