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.
Discussion
Every cycle brings new disappointments
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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.