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LINKS FOR ADDITIONAL READING FOR THIS VIDEO & ALL INFO IN TEXT DOWN BELOW:
Power Laws: https://necsi.edu/power-law
5 Customer Segments of Tech Adoption: https://ondigitalmarketing.com/learn/odm/foundations/5-customer-segments-technology-adoption/
Bitcoin Price history: https://www.coolwallet.io/bitcoin-price-history-and-guide/
@Moonoverlord on Twitter points out long term bull market potential: https://twitter.com/MoonOverlord/status/1169232644929990659
Interactive chart for technology adoption in the US over the years: https://www.visualcapitalist.com/rising-speed-technological-adoption/
As I get into this article you’ll see these price borders and the predicted years Bitcoin will hit these points.So a power law for those who may not be familiar is a functional relationship regarding statistics that involves two quantities, where a relative change in one quantity results in a proportional relative change in the other quantity, independent of the initial size of those quantities: one quantity varies as a power of another.
So as we take a look at the graphs presented here, notice there are two corridors or sections, one red, one green. With the red section representing the very volatile moonshots and crash landings, and the green corridor looks to be the consolidation phases. It’s pointed out that bitcoin spends roughly equal amounts of time in each corridor meaning that the duration of a hefty rise and fall in price is roughly equal to the amount of time spent in phases of consolidation.I know many of you are watching to get your fix of some price predictions, keep in mind that this particular model is not exactly precise and is focused on the long-term trends of Bitcoin. so ACCORDING to this particular model, it is showing that Bitcoin will not reach $100,000 until the year 2021 and Bitcoin will not be lower than $100,000 any time after the year 2028. Likewise, it’s showing that Bitcoin will not reach $1,000,000 before the year 2028 and after the year 2037, Bitcoin will not be less than $1,000,000. Pretty much it is showing the limitations of how high or how low Bitcoin can go over time. Also notice the years on the x-axis of the graph and how they are grouped closer together as the years progress. I believe this was designed to demonstrate the fact that (as it’s pointed out in the article) investors who buy at the top of a bull run during the fomo mania need to wait longer amounts of time as each cycle comes and goes before they can see any kind of gains of that investment. Translated to as time moves on, bull markets will last longer and also take longer to hit all time highs as the bulls fade away and bears file in and the cycles repeat. This concept was also pointed out by Moonoverlord on twitter with his thoughts on velocity as it applies to Bitcoin and adoption. His tweet says: “With each dollar added to the marketcap it becomes that much harder to grow and the percentages become more incremental. A bull market at this scale will take years to play out to full effect”
From here you can venture down a whole bunch of rabbit holes regarding trends of technology adoption, whether or not power laws will remain relevant or accurate in perpetuity regarding the price trends of Bitcoin, the fact that other cryptocurrencies exist and whether or not it’s possible for Bitcoin to be dethroned and how that event would affect the distribution of investments in the crypto space. It’s all brand new, it’s all experimental, and we have the unique privilege to be witnessing the beginnings of this disruptive technology all play out.