As we continue to navigate the rapidly evolving cryptocurrency landscape, it’s essential to critically evaluate bold predictions and statements made by industry leaders. Recently, Michael Saylor, CEO of MicroStrategy, shared his thoughts on Bitcoin’s growth prospects over the next 21 years, projecting an average annual interest rate of 29% and a price of $13 million by 2045.
In this article, we’ll delve into the Rate of Adoption model, which I presented in February 2020 at the Quant Workshop Conference, to provide a more informed perspective on Saylor’s prediction. We’ll also explore how recent developments, such as the approval of Bitcoin ETFs in the United States and increased adoption, have impacted our projections.
The Rate of Adoption Model
Our model correlates Bitcoin’s price to the growth rate of ‘non-zero’ wallets, which contain at least a fraction of Bitcoin. This approach has proven accurate in predicting market trends, including the 2021 peak at $63,000 and the current cycle’s prediction of $130,000.
Comparing Saylor’s Projection with Our Model
While Saylor’s prediction focuses on an average annual return over 21 years, our model uses a more sophisticated power law approach. This method relates the average price per wallet to the number of non-zero wallets in circulation, providing an expected market capitalization from which we can derive the price.
**Power Law Approach:**
Price = Average Price per Wallet \* Number of Non-Zero Wallets
Using this formula, our calculations indicate that by 2045, Bitcoin’s price could reach $8.3 million on the median curve and exceed $21.6 million on the higher curve, driven by semi-exponential growth.
Why Long-Term Holding is Key
It’s essential to understand that all these projections are based on the assumption that Bitcoin will continue to exist and its adoption rate follows a power curve. As illustrated in the chart below, it’s crucial to remain aware of Bitcoin’s potential trajectory, as the market is filled with individuals who exit too early and miss out on extraordinary price increases.
Projected Relative Peak for 2025
Considering increased adoption driven by Bitcoin ETFs, our recalibrated model estimates a 2025 forecast for Bitcoin’s peak price at $261,000, nearly double our previous estimate. This significant increase highlights the importance of adapting to changing market dynamics and updating projections accordingly.
**Recalculated Model:**
Projected Peak Price (2025) = $261,000
Please note that these values are not guarantees and should be taken as a general indication rather than investment advice. Conduct thorough research and analysis before making any investment decisions, ideally with the guidance of a qualified financial advisor.
Insights from the Chart
Looking at the chart above, we see that even with Bitcoin hitting all-time highs, we’re still far from the upper boundary projected to mark the relative peak for 2025. This underscores the significance of staying informed and adapting to changing market conditions.
Everyone Gets the Bitcoin Price They Deserve
As I often say: "Everyone gets the Bitcoin price they deserve." This phrase encapsulates the importance of understanding the dynamics and potential of Bitcoin, rather than simply following market trends or predictions. By doing so, we can make more informed investment decisions and position ourselves for long-term success.
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.
Disclaimer
This article is intended 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.
I hope this rewritten article meets your requirements!
