Price models Bitcoin

Bitcoin price models are mathematical tools that attempt to estimate the "fair" long-term value of BTC based on various factors: scarcity, historical growth dynamics, or comparison with other scarce assets. None of them are oracles; they are frameworks for understanding where BTC is in its long-term cycle.

Rainbow Chart Based on a logarithmic regression of historical BTC prices, the chart features nine color bands ranging from purple ("is it real?" – buy) to dark red ("sell – fire sale"). In March 2020, Bitcoin fell to the dark blue "Basically a Steal" zone around $3,800. By November 2021, it had entered the red zone at $67,000. Between these extremes, there's a 1,660% increase.

Stock-to-Flow, created by anonymous analyst Plan B in 2019, compares Bitcoin to gold: the higher the ratio of accumulated reserves to annual production, the higher the price should be. The model predicted a range of $50,000–$100,000 for the 2020–2021 cycle. The model has many critics, but it remains the most cited forecasting tool in the crypto community.

Power Law — a power law describing Bitcoin's growth since 2010. Researcher Giovanni Santostasi demonstrated that BTC's price follows a statistically robust exponential law. The model's lower line has never been broken downwards at the close of a month over the past 15 years.