Giovanni Santostasi’s Bitcoin Power Law model has made a bold prediction regarding the future price of Bitcoin. According to the model, there is a solid floor at $30,000 that Bitcoin will not drop below again. This suggests that Bitcoin’s price will only continue to rise, with the current ‘fair price’ estimated at $86,339 and a potential ceiling at $332,543.
The model uses linear regression to establish support and resistance bands based on historical price data. The support band indicates the lowest price that Bitcoin should reach, while the resistance band sets the upper limit. The model forecasts that Bitcoin could reach $100,000 per coin before 2028 and will not dip below this price afterwards. It also predicts that Bitcoin might even hit $1,000,000 between 2028 and 2037, maintaining this level thereafter.
The foundation of this model lies in the power law distribution, a statistical relationship observed in natural phenomena and financial markets. This distribution has provided a reliable framework for predicting long-term price movements. While critics argue that the model heavily relies on historical data and may not factor in future market forces or unforeseen events, it still offers an interesting perspective on Bitcoin’s potential growth.
Unlike the Stock-to-Flow model, the Power Law model has never been proven wrong. If this trend continues, the fair price at the next halving in 2028 could be around $290,000. This indicates a promising outlook for Bitcoin’s future price trajectory and reinforces the belief among some analysts that Bitcoin’s value will only continue to rise in the long run.
Overall, while the Power Law model may have its critics, it provides a structured approach to understanding Bitcoin’s price movements and offers valuable insights into the potential growth of the cryptocurrency. It will be interesting to see how Bitcoin’s price evolves in the coming years and whether the model’s predictions hold true in the face of changing market dynamics.