BTC Scaling Law Model has been right for the last 15 years, real price and model comparison.

Giovanni Santostasi
quantonomy
Published in
2 min readJan 11, 2024
The BTC Scaling Law, the x-axis shows the prediction of the model, and the y-axis the real BTC price on the same day. As you can see the modeled price and the real price are a close match over long periods.

I’m in the process of writing a much longer article on the BTC power law and why it is so relevant and important but for now I want to share this graph.
I have mentioned the power law model in previous posts here (Harold Christopher Burger quoted my posts on Reddit as an inspiration when he wrote about the BTC Power Law model some time ago https://www.reddit.com/r/Bitcoin/comments/9cqi0k/bitcoin_power_law_over_10_year_period_all_the_way/). As far as I know I was the first person to recognize BTC followed a Power Law.

I’m going to rename it the “BTC Scaling Model” because it is about comparing the growth of BTC in terms of scales of price ($0.1,$1, $10, $100,…) and scales of time (1 day, 10 days, 100 days, 1000 days,…). When this comparison is made it is evident a clear relationship exists and makes the BTC growth scientifically predictable over the long term. Here I rescaled time in terms of the predicted price by the BTC Scaling Law.

That means I used the formula in the graph (notice Price means Model Price) to calculate the predicted price on a given day and used this price for the x-axis data points. Then I looked at the real price for the same day and that are the values of the data on the y-axis. If the model predicts correctly the real price then we would get a perfect straight line (blue line). You can see this is not the case of course (I’m not a magician, but merely a physicist) but on average the model predicts almost perfectly the general trend over 15 years and 4 orders of magnitude!

The utility of the model is also to show when the real price is overvalued or undervalued (above or below the blue line). Notice that the green line that represents a 50 % undervaluation catches almost perfectly the bottoms of the cycles, while the 2x overvaluation gets us close to the tops. Then this chart can be used to tell us when to get in and out of the market to multiply your BTC.
You can follow updates on the BTC Scaling Law model here: https://twitter.com/Giovann35084111

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Giovanni Santostasi
quantonomy

Physicist, neuroscientist, financial analyst. CEO and Director of Research at Quantonomy: https://www.quantonomy.fund/giovanni-santostasi-phd