In a recent statement, Michael Saylor, CEO of MicroStrategy, made an interesting claim regarding the future value of Bitcoin. According to Saylor, Bitcoin will grow at an average annual interest rate of 29% over the next 21 years, with a potential price of $13 million by 2045.
Understanding the Rate of Adoption Model
Daniele Bernardi, founder of Diaman, has developed a model that correlates Bitcoin’s price to the growth rate of "non-zero" wallets. The model, which was first presented at the Quant Workshop Conference in February 2020, predicted the 2021 peak at $63,000, slightly below the all-time high of $67,000.
The 2023 Update: Recalibrating the Model
In 2023, Bernardi updated the model and published the results in Cointelegraph. The prediction for the current cycle was $130,000, a price that Bitcoin is likely to reach soon. With the approval of Bitcoin ETFs in the United States and several companies promoting such instruments, it’s clear that the parameters have changed.
Recalibrating the Model: A New Forecast
Bernardi has recalibrated the model and is ready to estimate Bitcoin’s price in 2025. Before giving a short-term prediction, he compared Saylor’s projection to his own model. Saylor predicts an average annual return over the next 21 years, while Bernardi’s model uses a more sophisticated power law.
The Power Law: A More Accurate Approach
Bernardi’s approach relates the average price per wallet to the number of non-zero wallets in circulation. The multiplication of these variables provides the expected market capitalization of Bitcoin, from which it’s easy to derive the price. This method is more accurate than Saylor’s prediction and provides a clearer picture of Bitcoin’s potential trajectory.
The Potential Trajectory: $8.3 Million by 2045
Bernardi’s calculations indicate that by 2045, Bitcoin’s price could reach $8.3 million on the median curve. On the higher curve, driven by the semi-exponential surge marking the end of each bullish cycle, it could exceed $21.6 million.
The Importance of Long-Term Holding
It is crucial to remain aware of Bitcoin’s potential trajectory and not settle for short-term gains. The market is filled with individuals who exited too early and missed out on subsequent price increases. Bernardi is not suggesting holding Bitcoin indefinitely, but it should undoubtedly be held for as many years as possible.
The 2025 Forecast: A Relative Peak
Bernardi’s model predicts a relative peak for 2025 of $261,000, nearly double the previous estimate. The increased adoption driven by Bitcoin ETFs has changed the parameters and made this prediction more accurate.
Conclusion
In conclusion, Michael Saylor’s prediction is based on an outdated approach, while Bernardi’s model provides a more accurate picture of Bitcoin’s potential trajectory. The price of $13 million by 2045 is not supported by any credible evidence and should be taken with a grain of salt. The recalibrated model predicts a relative peak for 2025 of $261,000, which is a more realistic estimate.
Recommendations
It is essential to understand the dynamics and potential of Bitcoin thoroughly before making any investment decisions. Conducting thorough research and analysis with a qualified financial adviser is crucial to avoid costly mistakes.
A Final Word: Everyone Gets the Bitcoin Price They Deserve
The price of Bitcoin is not determined by external factors, but rather by the individual’s ability to adapt and understand its potential trajectory. It is essential to be aware of the risks and rewards associated with investing in Bitcoin and make informed decisions accordingly.
About the Author
Daniele Bernardi is a serial entrepreneur and founder of Diaman, a group active in investment management, software development, and crypto activities. He was recognized as an "Inventor" by the European Patent Office for his European and Russian Patent in the field of mobile payments.
References
- The Rate of Adoption Model: A mathematical model that correlates Bitcoin’s price to the growth rate of non-zero wallets.
- Cointelegraph: A leading online publication providing news, insights, and analysis on cryptocurrency and blockchain technology.
This article is for general information purposes only and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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