OneBigLife on Nostr: There has been a lot of recent discussion on the Power Law model () which gives a ...

There has been a lot of recent discussion on the Power Law model (https://hcburger.com/blog/diminishingreturns) which gives a prediction of a range of bitcoin price against time.
It's noteworthy because price has continued to conform to the channel shown in the picture many years after the model was published - the red part of the line.



A model is just a model, and they can break. The log range used in these types of models is huge, so of course they are anyway useless as trading or timing tools. And as many people have pointed out, these chart models cannot take into account the real world fundamentals, such as the recent launch of the ETFs.

But there is still signal in these charts:

- we can expect ever increasing returns
- returns are a multiple of adoption increase (e.g. 10X adoption = 100X price)
- those returns are DIMINISHING rather than exponential.

You don't necessarily need a Power Law chart to work those things out, but the chart verifies the logic, and is currently the best model when correlating price against time. I don't suggest anyone (seriously) predicts price against time, because it will make you look like a fool.

But it is fun. And it is good marketing for bitcoin, which brings new adoption - and that is good.

A live chart is available at https://charts.bitbo.io/long-term-power-law/.