The value of bitcoin is constantly changing in today’s world, but there is a new price model that provides a mathematical insight into its future value.
Known as the “Bitcoin Power Law,” this model utilizes algebraic principles and natural laws to predict bitcoin’s price trajectory. Combining elements of science and finance, it forecasts that bitcoin will reach an all-time high of $1 million per unit by the year 2033.
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According to the Bitcoin Power Law, the price of BTC can be predicted by following the same patterns observed in natural phenomena that are governed by power laws.
Fred Krueger and Giovanni Santostasi, who support BTC, created a formula (Estimated Price = A multiplied by (days from GB)^n) where GB represents the Genesis Block and (n) is set at 5.8, in order to track the price of BTC since its inception.
This particular model is noteworthy because it not only precisely mirrors the fluctuations in bitcoin’s past prices, but it also predicts a significant increase to $1 million per coin by the year 2033.
Furthermore, according to the model, the value of bitcoin is expected to reach an impressive $10 million by 2045. Krueger, a strong supporter of BTC, often mentions Hal Finney’s forecast of a $10 million value and connects it with their own price model.
In his 2009 statement, Finney proposed a thought experiment where bitcoin achieves success and becomes the prevailing payment system globally.
In this scenario, the currency’s overall worth would be equivalent to the combined value of all the wealth in the world, which is estimated to range from $100 trillion to $300 trillion according to current reports on global household wealth.
With a total of 20 million coins in circulation, the value of each coin would be approximately $10 million.
Power Law’s Impact on Bitcoin’s Future Growth
According to supporters of the Power Law, the model is perceived to be distinct from the Stock-to-Flow model.
Both critics and proponents are thoroughly exploring the implications of the model, discussing its feasibility and drawing comparisons to other models such as Plan B’s stock-to-flow (S2F) price model.
The S2F price model has been met with doubt in recent years due to its perceived lack of reliability.
However, supporters argue that what sets the Power Law apart is its fundamental belief that BTC’s growth will follow a similar pattern to that of a city, gradually expanding over time rather than experiencing sudden, unpredictable surges.
This perspective aligns with the core essence of BTC as a decentralized financial ecosystem, increasing in value and influence with every new user.
The most recent monthly report shows that #Bitcoin is nearing the value of one kilo bar of gold.
In just 11 years, the BTC/Au has increased by a factor of 480 (equivalent to 48000%). Future goals include reaching the value of 100 ounce and 400 ounce gold bars. pic.twitter.com/EnVPoLVUZG
Although the Power Law model has a positive perspective, it is met with doubt as some doubt its ability to accurately predict financial markets using mathematical models.
Nevertheless, Santostasi’s model, which has been verified through regression analysis, boasts an impressive 95.3% accuracy, strengthening its credibility among supporters. Challenging conventional growth beliefs, the Power Law model suggests a consistent and significant increase in the value of bitcoin, with a growth rate of 5.8.
This confidence in BTC based on the Power Law is derived from a thorough examination of its past price trends since its creation.
Conclusion
Advocates of the Power Law theory claim that, like physical and biological phenomena, the growth of bitcoin follows a scaling pattern with time.
This can be seen in a log-log graph where both price and time are scaled logarithmically. This pattern implies that the value of bitcoin changes proportionally to time, regardless of its initial size, resembling the behavior of complex systems found in nature.
Moving forward, the validity of this theory and its impact on investors and enthusiasts will be closely monitored, similar to the scrutiny faced by Plan B’s S2F model and rainbow charts.
Read More: Bitcoin Price Prediction 2024 – 2040
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