Tom Mitchelhill3 hours agoPhysicist explains how his ‘Power Law’ model got to $10M Bitcoin by 2045The price of Bitcoin could increase by 6300% in the next 15 years, according to Giovanni Santostasi’s power law model.4017 Total views12 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksFormer physics professor Giovanni Santostasi has shed new light on his “power law” model for predicting the price of Bitcoin, which arrived at a prediction of $10 million per individual BTC by 2045.
A power law is a mathematical relationship where one value is proportional to a fixed power of another value. The power law has been observed throughout a wide range of naturally occurring phenomena, from the frequency of earthquakes to the dynamics of stock market changes.
Santostasi first shared the power law model in the r/Bitcoin subreddit in 2018. However, it witnessed a resurgence in January after finance YouTuber Andrei Jeikh mentioned it in a video to his 2.3 million subscribers.
Santostasi said the model predicted that Bitcoin (BTC) could reach a peak of $210,000 in January 2026 and then fall as low as $60,000 afterward.
In a March 2 discussion with mathematician and Bitcoin investor Fred Krueger, Santostasi said a power law model displays a more easily understood and predictable model of Bitcoin price action over long time periods.First cut from my 90 min deep dive with @Giovann35084111
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— Fred Krueger (@dotkrueger) March 2, 2024
In contrast, the majority of short-term Bitcoin price charts used in mainstream media tend to show a “messy” and inaccurate view of Bitcoin’s price action.“The linear chart that they usually show in TV — what [Jim] Cramer is talking about — looks messy.”
“But when do you the log of the y-axis, and you start to see some regularity there, it doesn’t look that messy, it looks like a very nice pattern,” he explained.
Santostasi said that, unlike the now widely-criticized stock-to-flow model, the power law is logarithmic instead of exponential.
This means Bitcoin’s price doesn’t have to increase constantly over time, and significant fluctuations in price — witnessed most recently between 2020 and 2023 — can still be accounted for under the model.
Related: Bitcoin daily withdrawals challenge records as $2B leaves exchanges
In a follow-up post to X on March 3, Krueger outlined further mathematical modeling of the power law when applied to Bitcoin, which predicted that Bitcoin would reach a price of $100,000 within the next two years.Krueger"s modelling of the power law predicts a Bitcoin price of $10 million by 2045. Source: XFred Krueger
Krueger added that if Bitcoin adheres to the power law model, its market cap will overtake that of gold by the year 2033, at which point Bitcoin would be worth $1 million per coin.
Despite Santostasi’s and Krueger’s belief in the power law model, critics say that any mathematical model can be prone to substantial errors and does not account for random events that could have a serious impact on price.
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