Say you have a relation b/w Y and X, and you take the logarithm of both data sets and plot them. If the resulting plot is linear, it is said the data follows a Power Law relation. Examples in nature (magnitude and # of earthquakes a year, # of cities and people, mammal metabolic rate and mass, etc..).
That is: Power Law: Y= k * X^n (k and n are constants)
1) A power fit on BTC price Vs Time works well, because BTC and Time have a power-law relationship, as seen by the linear trend on the top of the image I attached. 2) Extrapolating, we have easily a few cycles of bliss before price begins to depend less on supply inflation, and more on other factors (demand for BTC, price, etc). 3) Each consequent cycle will have smaller gains than the one before it. 4) You also get a power-law relationship between: i) BTC price and BTC supply ii) BTC price and stock-to-flow This is because both of these factors are functions of time (gotta love programmable money).
Conclusion: Why aren't you buying BTC this year anons? Why are you gambling on shit coins?
>I only buy coins that fulfill their original use case I could give two fucks what you think, and so does the BTC ecosystem. The point I am making here is, BTC will increase in price as time goes on (supply inflation decreases) whether you like it or not.
See attached example relating frequency of earthquakes and earthquake magnitude. Areas with higher magnitudes have less quakes as compared to areas with smaller magnitudes quakes.
Log-log is very useful in science and engineering, I can see your point in that people can manipulate data to make it seem like data is correlated, but BTC in my opinion clearly follows a power-law relation with time / supply
Yeah maybe. Can you put previous halvenings on the graph? I’m curious to see where they fall.
Eli Morris
Nvm I’m a brainlet.
Jordan Murphy
I think what that user meant by shitty data set is that the history is too short. Compare it to the stock market for example. Also BTC hasn’t gone through a recession yet, so who knows how much of its success has been fueled by post ‘09 bull markets.
Benjamin Jackson
I'll buy in once it crashes to $2500
Liam White
>BTC will increase in price as time goes on Typical nonsense boomer logic. Not talking about value creation or adoption. No I won't support that. I did years ago before BTC's devs abandoned the mission without the consent of the community, which then fractured.
Adrian Foster
Even the stock market is a bit of a shitty data set, but it looks much cleaner if you log-log plot it.
Brayden Collins
>Why are you gambling on shit coins?
100% chance alts will out perform BTC on ROI like they did in 2017. Why are you gambling on BTC when its obvious that lightning is a dead end solution.
Alexander Powell
Tell that to the alts of 2013-2015
Jonathan Wilson
Ended up making you a chart on the log-log anyways
Not to be a dick but you forgot to label the x axis tickers
Nicholas Jones
Producer's mine bitcoin for two reasons, really one: Generating income by selling to people who will pay for it. Every halving, production cost at least doubles. The value of bitcoin is the value of the network, and almost can be seen as what the miner's are willing to sell at, seeing as how they are the virtual commodity producers. The cost to produce a bitcoin will only increase. Thus, since bitcoin has the best brand recognition, liquidity, security, simplistic programming, no central owner, and diminishing supply-inflation, you can EXPECT the price to rise. Let's not forget that BTC has hundreds of thousand times more hash power than even ethereum.
My point is, there is confluence for why bitcoin has value, and why it will continue to dominate. People are accumulating (UXTOs greater than 1 yr rising), and the production cost to mine a single bitcoin is in the same magnitude as market price.
Fair but from your own graph the cost of production is now higher than the selling price for the first time ever. My limited understanding is that the hash power required adjusts dynamically so that could change, but regardless crypto is a totally new thing. I’m not disputing that it will likely increase in price over time, I just don’t think we know enough to be able to predict the slope, the power law exponent or even the shape of the curve necessarily.
Luis Martin
I like all the quantitative analyses (halving, NVT ratio, hodl wave). It’s the “qualitative” part that I can’t get around. Value of stocks are derived from cash flow, so there’s a sense of being tied to the real world’s productivity. Cash flows can go up or down (think iPhones), which makes sense. The price of BTC though is really tied to people wanting to dump it on the greater fool. That desire to dump is going up with the price right now, but eventually everyone will be so familiar with this game that no more greater fool will be left on earth.
Jack Roberts
>That desire to dump is going up with the price right now, but eventually everyone will be so familiar with this game that no more greater fool will be left on earth.
By that time the volatility will have drastically decreased and it will be gaining adoption as a currency.
Jeremiah Reyes
I agree, I am only guessing the direction and overall movement, which I believe to be up.
Well, think big picture: People value BTC, and are willing to pay a certain amount for their BTC, to do whatever they please with it. That could be trading, holding, buying things with it, transacting value with it, it' money that can be sent on the internet. Its money that cannot be confiscated, declined, has no central owner, no way of printing more supply, it is secure.
But why is it secure? The miners. Satoshi created the perfect ecosystem where miner's are provided enough reward to stay and secure the network. As price rises due to speculation and demand, new and existing miner's start ramping up production in order to turn a profit, further securing the network.
Pic related for satoshi quote, here's another: "The price of any commodity tends to gravitate toward the production cost. If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more. At the same time, the increased production would increase the difficulty, pushing the cost of generating towards the price.
In later years, when new coin generation is a small percentage of the existing supply, market price will dictate the cost of production more than the other way around."
>price dips immediatlely after a halving and then begins a golden bull run in both previous instances >lining up to do the exact same thing a third time
I hear you. I just have conflicting opinions on all this. At the end of the day though I’ll trade based on charts not opinions of what people think BTC is. When everyone’s emotions start running on FOMO, everything becomes good news. Opposite is true too. You can only live by the charts.
Michael Watson
It doesn't look like it dipped after the halving the first time. Besides, the price starts slowly rising a year out before the halving. Don't bet on a 2k Bitcoin. You should be DCAing right now.
Jason Taylor
Not sure about anyone else but I have a big amount of cash ready to buy the 2,000 area
Henry Myers
2k will come before the next halving, it won't be the dip after. see in the previous two cycles the market dives much further below the red line than we are now?
Robert Green
what data source are you using? where did you get the data pre 2010?
Eli Martin
I agree with this,
It wouldn’t be any fun without speculation, see image. A lot of similarities point to next few months, not that it matters to me, $4k is a good price.
The data I had begins sometime in 2010, cannot exactly recall how I got this continuous data, it’s available on the net (be careful).
because if btc rise so too will other coins, except link. Whoever hold link and dont remember 17, you going to miss out again.
Evan Nguyen
>custodial banking shows how little you understand
Jason Taylor
Not all alts survive though, it is a gamble
Owen Morales
Ive been using blockchain and cryptocompare data but their data isnt as clean as yours pre 2010. On a side note, instead of log log, if you use a regressed pseudo log log graph, you can actually get evenly spaced peaks and troughs, not just for the large 3 bull runs, but for the smaller ones at a weekly scale as well. you can try it for yourself. this has me thoroughly convinced that btc is following a known trajectory of a network growth rather than being random.
Isaac Taylor
My data begins around July 2010, I couldn't find anything in 2009 or early 2010. I am sure there is some data out there, but I figured there is enough data to see the big picture here.
I also agree 100%, the price action we are seeing zoomed out is not random, and has a lot to do with the programmed (strict, rigid) parameters. It is a virtual commodity.
my bad, what i meant by pre 2010 is from 2010 Aug. 17th throughout. anything earlier than 2010 is pretty much $0 and my data from aug. of 2010 to the years end is so choppy it fucks up the regression down the line. youre right about the price action, it strictly follows metcalfes law, which makes sense since btc is a giant graph. it would be stupid not to buy in now, even if it were to go to 2k.
>arxiv.org/pdf/1803.05663.pdf absolutely correct about metcalfe's law, theyve been predicting this on bitcoin talk forums starting with s curves since 2014. their LPPLS model claim is a bit more fuzzy, with those equations you could even fit the the solar irradiance output.
