https://img.inleo.io/DQmbq1dBnxDqKUomXYMfLsnBrQtr2waQ2C1N4DesXXtyGvn/curve-power-chart-graph-law-80-20.png
https://img.inleo.io/DQmdEr586jb9zDsvy1NMXZhaMLdERL2VEmoa5LHLqpCF4wC/image.png
A power law is a relationship in which a relative change in one quantity gives rise to a proportional relative change in the other quantity, independent of the initial size of those quantities. An example is the area of a square region in terms of the length of its side.
In this case it means Bitcoin halving makes number go up.
Wow so they finally figured it out.
Bitcoiners are running around thinking they are geniuses right now because they learned how to draw a straight line on the log chart. This is something I've been pointing out since 2018. I've been calling it the doubling curve, and I have to say this is such a hilarious thing to be going mainstream right about now.
It looks like the big difference between the Power Law and the Doubling Curve is that the Curve only factors in price on the log scale while the Power Law factors in time on a log scale as well... which is pretty weird but whatever. Apparently it also has applications in other areas of cosmic scale, but I'm not really interested in going down that rabbit hole.
I must admit that calling it the Power Law sounds so official and scientific. It's a good brand that Bitcoiners will surely rally around until it is inevitably busted. How long will it take the model to get destroyed? Probably next bull market I assume. This tends to be how these models work out. Especially when everyone starts becoming so sure of the outcome.
https://img.inleo.io/DQmTE6C67wJ8cD7Eywf33siZzNQ7cZVY39jdjKYTRPZZrN6/image.png
Doubling Curve
This is the model that I'm still using. It still has yet to be invalidated. Perhaps if we never trade above the line by next peak it will be. Until then we are temporarily embarrassed millionaires resulting from the collapse of 3AC, UST, and FTX in 2022. We've been trading under the line for less than 2 years... in fact we will hit that 2 year mark in May. Guess what I think might be happening in May or June? We'll see.
Time is still on a linear scale here and there's no reason to believe that anything has changed as far as I'm concerned. Well, especially now that the climate is hyper-bullish. The line currently sits at $120k and there's no reason to think we can't catch up to it at $200k by the end of the year or earlier. This line extends all the way back to the end of 2013 at a base of $100.
https://img.inleo.io/DQmSYBaJXSS7YHetgfESLUKD8oawAimdNJzxe6w2tffevtu/log-trendline-doubling-curve.jpg
https://img.inleo.io/DQmZVxZkYHeP7vYqw8W5JBCQxRiVWAgDYneWvZknFemt3LR/log-trendline-doubling-curve-2.jpg
https://charts.bitbo.io/long-term-power-law/
A very interesting intersection between the Power Law and the Doubling Curve is $400k. $400k seems to be the crux of a lot of models in fact. The Power Law states we should peak somewhere around $400k while the doubling curve expects a bubble at least x2.5 higher which just so happens to be $1M BTC. In 2017 and 2013 we were x13 and x11 higher than the curve respectively which is more in the $4M-$5M range. So all we have to really do is wait and see what happens in over the next 18 months or so.
Know what I think will happen?
We'll be trading at something like $250k at the end of this year and everyone will be taking gains and calling an end to the bull market early. There's a consensus that the bull will end early because we hit all time high early as well. I'm not buying it but we'll see. Linear comparisons to the lackluster 2021 run are irrelevant as far as I'm concerned.
Rule of three
Bitcoin really likes to do things in groups of three. And wouldn't you know it we've already done three halving events and we are onto the fourth one. The chance that we do something completely unpredictable is quite high in my opinion for a lot of different reasons. And when that happens we'll hear all about S-Curves and super cycles.
https://img.inleo.io/DQmQ9e2AzzhpE2rpqUY1Yb8osUB172qks87k1XSCNKqTDLc/image.png
https://img.inleo.io/DQmcgsk5Nc4ChL3uHR8Get5ga4rDtCFHJdG3dpdgAgfbXPB/image.png
S-Curve
The S-curve is a technological phenomenon in which early adoption and bootstrapping of cutting edge tech starts out very slow and then explodes into mainstream adoption. When applied to Bitcoin it is thought that the price will explode in a similar looking S-shape, except with a flatter middle and a tail that goes to infinity within the supercycle.
https://img.inleo.io/DQmTC6JRqdYvg6rZPPryeJmLuVnh2554pius7SkqXANyq8D/image.png
Supercycle
The supercycle is an only-up wet dream in which the pain of bear markets is a thing of the past. Rest assured that when the Power Law is proven wrong the supercycle and hyperbitcoinization will be the talk of the town. "This time is different." "We're never coming back down."
Hyperbitcoinization
The hypocritical idea that all Bitcoin zealots hold dear; that all the universe's wealth will ironically be contained within the confines of the Bitcoin blockchain. Because there no solution to centralization like even more centralization, amirite?
Absolutely perfect timing.
There's only one reason to post charts and make speculation like this, and that is to sell the top and not get caught off guard by the bear market. This goes directly against the ethos of the communities that create these models in the first place. Which is it? You gonna HODL forever or you gonna try to time the top? Can you really have both? Is Bitcoin the exit or is the exit to USD inevitable?
The Power Law gaining popularity right when it's about to be proven wrong is quite fantastic. It allows this entire situation to play out exactly like I think it will. The plebs will trade themselves into the poor house just like they always do. Constantly trying to time a top that doesn't fit any model and it just keeps going up. All I can say is that I'll be unloading at bit in November 2025 no matter what the price is. Not gonna fall into the "this time is different" trap like November 2021. Nobody needs that.
Are you ready for it?
Bitcoiners love to posit this question for events that never need to be prepared for. Imagine if a supercycle actually did happen and Bitcoin really did only go up. Why would anyone need to prepare for that? That's an environment where it's impossible to lose no matter what financial decisions get made. Asking if people are "ready" for the zero-pain narrative is a showcase of ignorance and illogicality. Never expect something like this to happen because even if you're wrong you still win.
https://img.inleo.io/DQmQfvezVbWySJMAwg4re6DCaCqUDxePKzX9tRidELCcoKb/greed-monster.png
Conclusion
If I'm being honest the Power Law chart does look pretty good at first glance. The numbers being predicted are high but certainly not out of the range of possibility. The fact that time is on a log scale shows that things should slow down as time goes on even though price is exponential. But is that really how technology works?
There are many problems with this line of thinking. The biggest one being measuring Bitcoin in terms of a USD unit-of-account. Can we really assume that USD is going to be a stable enough asset over a 10, 20, and even 30 year timespan? Definitely maybe! Maybe not. The only certainty is if USD crashes to zero then Bitcoin is worth infinity just like all the maximalists say. Dividing by zero seems to have that affect.
Bear markets in crypto are the WORST but there are many valid strategies to mitigate them. The problem with those strategies is that they require financial discipline like the ability to DCA sell while number keeps going up during peak FOMO. On a very real level it's much easier to just tell everyone to HODL or wait for some absurd price point rather than having to expend that kind of emotional bandwidth. And so this is where we are.
Return from Power Law to edicted's Web3 Blog
