Power law model price now is $88k ish. $119k in Jan 2026, $165k Jan 2027, $225k Jan 2028
Discussion
seems underwhelming. I don't believe institutional and state level buying are priced in.
While that may seem underwhelming, it is what one would expect _on average_ by looking at history and applying a plausible curve to fit the data as best one can.
While the trend line price is the real power in bitcoin, everyone is attracted by the blow off tops. Annual rates of return of 43% for 2025, 42-40% for 2026-2028 is in and of itself remarkable.
Will there be a period of time in the next few years where bitcoin price will be well above model price? Yeah. If you want to capture 95% of the daily price points in a band around the power law, simply take the model price and divide by about 2 and multiply by roughly 4.
Interestingly, if price deviates from power law model, it would imply something very profound about the money distribution amongst those new to bitcoin…power law progression would imply they hold a specific large fraction of the money supply, but if price is much much higher than expected, it’s because they have way way more money than everyone else in the market assumes.
If price fails to get up to model price, we’d know they have less money than expected.
So are the next entrants to the market richer than we expect or poorer? Time will tell.
I'm guessing richer since the next round seems like it will be large buyers probably mostly going through ETFs.
To your point above, a cagr of 40% is quite high and does lead to high price levels in 20 years. I believe Saylor ran his cagr projection at 20% and ended up at $46m per coin in 2040.
did you see Plan B is trading his bitcoin for an ETF? 🤦♂️
Meh. I suspect he’s going to have his bitcoin identity death.
Why? Two reasons.
1) security. He probably values all of his fingers. https://timesofindia.indiatimes.com/world/europe/10-arrested-in-france-over-kidnapping-and-torture-of-ledger-co-founder-and-wife-both-rescued/articleshow/117529185.cms
2) his model has been very useful but everyone who can do math knows eventually his model must fail to match reality. The fact that it has worked as well as it has from 2019 until now is a massive success.
Trust me. I’ve been around since July 2010. I’ve seen many disappear. I’d have disappeared too if I were smarter…because if I were smarter, I’d be phenomenally rich 😂
your first point is very interesting. all of these influencers are in a dangerous position being known as people who have a high stake in self-custodied bitcoin. dangerous to both themselves and their families.
Exactly.
Right now, the only ways to access security easily boil down to a scavenger hunt, with or without either a PIN code on a hardware wallet and/or a passphrase on the seed at the end.
But there has existed since the beginning of bitcoin a way to post date bitcoin transactions…and recently we can now time lock utxo’s directly for up to about a year. Combined these should be very useful primitives for time based security rather than space based security.
The power law model is a psyop to keep normies from becoming maxis. Very disappointing to see how much play it is getting this cycle.
Every cycle brings new disappointments
👀
Gotta keep the signal strong. Don’t let the noise distract from the real path.
lol…no. Flat out no.
All models are wrong. A wide variety of models could be used and fit bitcoin price over a period of time. That’s math. But what type of model makes sense? It’s true S2F and power law models fit historical price data well; both fit far better than any straight line.
But inherently exponential models can’t both fit for a long time and have a high slope today. Power law models can because the rate of change of their slopes is constant. Exponential models have an ever increasing rate of change of slope. One can’t expect eternal acceleration, especially if slope is already high.
For bitcoin to grow in dollar price as an exponential and for an exponential to fit the price for a long time, bitcoin price would have to be growing far more _slowly_ than power law model — otherwise a predicted price of infinite dollars happens way way way sooner than you’d expect.
Absolute scarcity and the halving results in fewer coins being competed for on the supply side all the while more demand is coming into the market. The price moves should be exponential and - yes - we should approach “infinity” (as you say it) relatively quickly vs. slowly grinding there via the power law.
Why would anyone who understand bitcoin own real estate as an asset for storing value, for example? Why would anyone own a treasury that has a 4+ year duration? All that capital is coming for bitcoin. All the while, just a little less than 95% of bitcoins are already in circulation. And they’re increasingly in hodlers hands.
I agree with everything above except exponential. US M2 money supply is exponentially growing…but its rate of growth is way way slower than bitcoin power law model. Power law for bitcoin is far steeper price vs. Time than expansion of M2.
In 50+ years, power law predicts bitcoin price growth rate will be roughly the same as M2…whereas S2F would imply bitcoin price would be increasing faster than ever. Time will surely tell here. All we have to do is wait to find out. But I guarantee you that if you live long enough, you’ll see the end of every exponential process in progress today.