First cut from my 90 min deep dive with @Giovann35084111
— Fred Krueger (@dotkrueger) March 2, 2024
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
Giovanni Santostasi, a former physics professor, has made an impressive forecast for the future price of Bitcoin with his "Power Law" model: By 2045, the value of a single Bitcoin could rise to $10 million, representing an increase of 6300% over the next 15 years. The "Power Law" describes a mathematical relationship where one value is proportional to a fixed power of another value. This law is found in numerous natural phenomena, from earthquake frequencies to stock market changes. Santostasi first introduced his model in the r/Bitcoin subreddit in 2018 and gained renewed attention after financial YouTuber Andrei Jikh mentioned it in a video. According to Santostasi's forecast, Bitcoin could reach a peak of $210,000 by January 2026 before possibly falling to $60,000.
This model, based on a mathematical relationship widespread in natural phenomena, paints a fascinating picture of Bitcoin's future. Unlike the now much-criticized Stock-to-Flow model, the Power Law model is logarithmic rather than exponential, meaning that significant price fluctuations, such as those observed between 2020 and 2023, can be accounted for in the model. Krueger further stated in another post on X that the Power Law model, applied to Bitcoin, predicts that the Bitcoin price could reach $100,000 within the next two years. Should Bitcoin follow the Power Law model, its market capitalization could surpass that of gold by 2033, raising the value of a Bitcoin to $1 million. Despite Santostasi and Krueger's belief in the Power Law model, critics point out that any mathematical model can suffer from significant flaws and may not account for random events that could have a serious impact on the price.