When Moon? Rational Growth Ranges for Bitcoin

Summary

Introduction

Methods

Price model

  1. PlanB’s excellent valuation model based on scarcity (stock to flow ratio)
  2. DaveTheWave’s price models based on two-parameter logarithmic regression

Adding a time shift parameter

Fit method

Results

The fit

The Levenberg-Marquardt algorithm was used to fit the three-parameter power-law curve to the daily price of bitcoin (BLACK line) from 17 July 2010 to 28 August 2019 (GREEN curve). The RED curve is 7x the price of the green line, the BLUE curve is 0.4x the price of the green line, to obtain a bandwidth from which range estimates can be derived.

Date range estimates

This is the same chart, but the x-axis is much expanded into the future so that the full price band of bitcoin reaches 1 M$. The green dots are the model date predictions when bitcoin reaches 100k$ and 1M$ and the horizontal whiskers are the range date predictions.
  • Date to reach 100k$: 15 Aug 2026 (11 Jan 2021 to 20 Feb 2030)
  • Date to reach 1M$: 23 Nov 2036 (30 Nov 2027 to 20 Jul 2042)

Not earlier and No later

  • Before 11 Jan 2021 bitcoin’s price is not likely to reach 100k$
  • Before 30 Nov 2027 bitcoin’s price is not likely to reach 1M$
  • After 20 Feb 2030 bitcoin’s price is likely never to fall below 100k$
  • After 20 Jul 2042 bitcoin’s price is likely never to fall below 1M$

Annual Growth range estimates

  • CAGR to reach 100 k$: 40% (25% to 455%)
  • CAGR to reach 1M$: 31% (23% to 76%)

The time origin of bitcoin and the validity of the model

Conclusions

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store