8 months ago
43 ARTICLE AD
Santostasi introduced the power law model on the r/Bitcoin subreddit in 2018, but it gained attention in January when finance YouTuber Andrei Jikh highlighted it.
Bitcoin (BTC) price is famously volatile, making it challenging to predict. However, physicist Giovanni Santostasi has developed a unique model called the “power law” to forecast the coin’s future price. According to a 90-minute video interview and analysis with Fred Krueger, Santostasi’s model BTC could potentially reach an astonishing $10 million per coin by 2045.
Santostasi introduced the power law model on the r/Bitcoin subreddit in 2018, but it gained attention in January when finance YouTuber Andrei Jikh highlighted it. The power law model suggests that Bitcoin’s price follows a mathematical relationship where one variable (price) is connected to another variable (time) through a fixed power or exponent.
First cut from my 90 min deep dive with @Giovann35084111
This is the chart that you "can't unsee".
Non-intuitive aspects of the power law
In the next 15 years of Bitcoin, we expect the price
to go up not by 2, but by 64! pic.twitter.com/K1RiQSPt1M
— Fred Krueger (@dotkrueger) March 2, 2024
Santostasi’s Near-Term and Long-Term Predictions
In the short term, Santostasi’s model predicts that Bitcoin might peak at around $210,000 by January 2026 before dropping to about $60,000. However, the most remarkable projection is the long-term forecast of $10 million per bitcoin by 2045, which implies a potential increase of over 6,300% from current levels.
The power law model challenges the conventional belief that the coin’s price grows exponentially. Instead, Santostasi’s logarithmic power law accounts for the significant price volatility and pullbacks that BTC has experienced. For example, BTC reached $69,000 in November 2021, and by the same month in 2022, it had already pulled back to $15,000. Only 16 months later, the price now trades above $60,000, The power law proponents argue that the model accounts for these wild price movements. They explain that it provides a clearer and more predictable understanding of Bitcoin’s price over extended periods compared to short-term charts.
Mathematician and Bitcoin investor Fred Krueger supports the power law model and suggests that the BTC market cap will surpass gold by 2033 if it continues to follow the model. This implies a price of over $1 million per bitcoin. In the same post on his X page, he also speculated that the price of BTC could rise up to $100,000 in the next two years.
Hyperbitcoinization timeline and the meaning of 5.8
——————————————————-
I have done a lot of thinking over the last 24 hours on the meaning of power laws, and the implication for future Bitcoin prices.
But as i asked @Giovann35084111 the… pic.twitter.com/4iSP0IQMse
— Fred Krueger (@dotkrueger) March 2, 2024
Critics, however, question the reliability of any mathematical model attempting to predict Bitcoin’s price years into the future. They argue that unforeseen events, regulatory actions, or technological advancements could disrupt the trajectory at any point. Bitcoin’s relatively new and speculative nature also adds skepticism to the use of past price patterns to forecast future outcomes.
Santostasi defends his power law model, stating that it offers a more robust framework than other popular models like the stock-to-flow model. He believes the logarithmic nature of the power law better captures Bitcoin’s ups and downs compared to models assuming constant exponential growth rates.
Only time will reveal the accuracy of the power law’s long-term Bitcoin price prediction. Regardless, the model has ignited an intriguing debate about how to forecast the future price of the pioneering cryptocurrency. While Bitcoin’s volatility makes forecasting challenging, bold predictions like Santostasi’s $10 million projection attract attention from investors, who increasingly perceive Bitcoin as a legitimate asset class and store of value.
