Stephen Reed's Million Dollar Logistic Model

[zimmah]

Did you even watch the charts? The date we reach a million is even before 2020 and I don't know about you, but I don't plan to die before that.

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[SlipperySlope]

Did you even watch the charts? The date we reach a million is even before 2020 and I don't know about you, but I don't plan to die before that.

Yes, I simply guessed at the $1 million maximum price for bitcoin. But whether that price is $20K or $100K or higher, the rate of growth before the mid point of adoption is approximately 10x annually according to results when I varied the model's parameters. I believe that if indeed the maximum price is $1 million then we will get there before 2020 according to my model.

[deisik]

Did you even watch the charts? The date we reach a million is even before 2020 and I don't know about you, but I don't plan to die before that.

I was almost sure that Arghhh by his post didn't mean we would reach a million per coin any time soon...

[oda.krell]

The single biggest flaw I can see in your model, slipperyslope, is the final valuation of $1M per coin, a constant that is barely motivated, and could well be off by one or two orders of magnitude (EDIT in either direction :D)

Even setting the final valuation as a moving target (say, percentage of global GDP or money supply) is problematic because of the same problem again: estimating a far away final state based on very little information.

The best way I could see would be to let the final valuation be a variable, and update it continuously by setting it to the output of another model that attempts to find the best possible estimate for which share of GDP/money supply will be distributed, at equilibrium, over 21M coins (minus lost coins, plus additional coins*probability that the protocol is changed to allow mining beyond 21M).

In any case, big kudos for the (uncommon in here) rigor of your approach.

[BitDreams]

https://www.tradingview.com/v/vdW6XF5v/

I've never used the Three-Drivers-Pattern (purple) so I'm not sure how to utilize the data points of .97 & 1.19. Artistically speaking, August (or sooner) looks to be a target for a test of the all time high.



Bullish Flag: http://www.investopedia.com/terms/f/flag.asp

[KeyJockey]

Well, in the interest of contributing something to this epic thread allow me to attempt a brief summary and some (possibly totally wrong?) conclusions in light of recent events / developments we've seen in the bitcoin world.

1. Recent price jump, for no really clear reason (?) but possibly signaling the end of the recent decline / contractions and maybe a bottom, leading to next leg-up to All-Time-High, according to Slip's model, this summer?  Or at least before year-end?  Hope hope.

2. Recently revealed analysis (or disinfo?) regarding MtGox manipulation being responsible for the last two big bubbles, in fact?

Meaning IF these bubbles were actually fake-outs on the bitcoin price, then Slip's model is based on bad data and we have NO real expectation of another BIG spike any time soon?  (However, seems to me that current price of $500-ish MIGHT be "real" market price, given that Gox is dead several months already now, and it's settled down in this 400-500 range, so price gains from here on out into the future might still be likely, but at a much slower and more incremental pace, based only on bitcoin usage increasing organically?)

IF SO, seems to me that this recent attempt of BTC to get up off the floor and resume trajectory to the moon is really going to be telling.

A very important next few weeks or month or two. 

A. If the spike holds, then Slip's model is not broken and we may carry on as before with assumptions intact.  
 -or-
B. If the spike breaks, then all bets are off and we've really no idea what the future BTC price action might hold.  

BTC probably can't go to zero any more, IMHO, since there's clearly a very solid "transaction utility" to the system as it works (very well!) today, and as many bitcoin evangelists often say, "The Blockchain Cannot Be Uninvented".

But transaction utility alone might be sustained even at current (or much lower) BTC prices... putting the kibosh on this $1M BTC idea?

Thoughts?

P.S. {Edit} By the way, I personally have not decided one way or the other about this yet, but really trying hard to, LOL.  I am certainly gonna hold on to the BTC I already own *but* the big $64,000 (literally) question is whether or not to go all-in with MORE, at this last chance, rock bottom, historic, final low-price Sale Event... if Slip's model is right and true OR if the MtGox shenanigans on those bubbles means the model will be proven wrong in the future....

[SlipperySlope]

Here is the latest chart of Log10 delta from trend, which is most helpful when considering relative bitcoin price bubbles . . .




The three charts and calculations of my logistic price model are published in a shared Google spreadsheet here.

[rpietila]

Here is the latest chart of Log10 delta from trend, which is most helpful when considering relative bitcoin price bubbles . . .

The three charts and calculations of my logistic price model are published in a shared Google spreadsheet here.

If we name the zone below -0.3 as the ridiculous rock-bottom slam-dunk buy zone, we are now in the middle of it at -0.35.

[SlipperySlope]

Here is the latest chart of Log10 delta from trend, which is most helpful when considering relative bitcoin price bubbles . . .

The three charts and calculations of my logistic price model are published in a shared Google spreadsheet here.

If we name the zone below -0.3 as the ridiculous rock-bottom slam-dunk buy zone, we are now in the middle of it at -0.35.

Yes, and accordingly I will think about you and your fount of good advice when I make my almost daily trek to the ATM to buy some fractional bitcoin.

[BitDreams]

2. Recently revealed analysis (or disinfo?) regarding MtGox manipulation being responsible for the last two big bubbles, in fact?

If you are going to consider that mtGox manipulated prices to the all time high then should one also take into account that the closing price of BTC at mtGox when they shut down was very near 100$. Regardless of rumors, the truth is reflected in price.

I'll place this in bold: mtGox manipulated the price DOWN to 100$ yet the other exchanges refused to follow Instead of questioning the higher price, as a confident long term holder, I remain focused on the fact that mtGox could not take everyone down with them.

If I were looking to gain a better entry into bitcoin I'd be promoting the doubts raised by the article you are speaking of though, not that it's doing any good.

[Bitcopia]

This is one of the most well researched and prepared threads on this forum... not to mention one of the most exciting! Thanks for the work SlipperySlope, Peter R, and everyone else who contributed thoughtful discussion.

[KeyJockey]

mtGox manipulated the price DOWN to 100$ yet the other exchanges refused to follow
Instead of questioning the higher price, as a confident long term holder, I remain focused on the fact that mtGox could not take everyone down with them.

That's a really good point, which I have not heard raised anywhere else.  So yeah, thanks for that.  I agree it's significant.

Also, just thinking thru all this lately, it occurred to me that this 10x trend has actually already repeated SIX times.

Bitcoin's history so far, starting around 2008 when Satoshi wrote the paper, I figure (roughly)...

1.) 2008-2009 price .1 cent to maybe a penny (10x)
2.) 2009-2010 price 01 cent to maybe a dime (10x)
3.) 2010-2011 price 10 cents to maybe $1 (10x)
4.) 2011-2012 price $1 dollar to maybe $10 (10x)
5.) 2012-2013 price $10 dollars to maybe $100-ish (10x)
6.) 2013-2014 price $100 range getting briefly to $1000+ (10x) (and now midrange of that)

...this is not directly linear or smooth, by any means... and the dates are not exact of course.  BUT y'know... just looking at the charts with the two or three big bubble spikes mainly visible, it's easy to overlook or forget that the pattern has SIX iterations, so far.

Maybe it's just me, but I feel better about expecting the cycle to repeat again (and again, and again?) if it's got six iterations already behind it, rather than just a couple.

Seeing if we have THREE more to go, hopefully...

7.) $1000 going to $10,000 (10x)
8.) $10,000 going to $100,000 (10x)
9.) $100,000 going to $1,000,000 (10x)

...I'm IN for the ride, LOL, and trying to convince everyone I can that they should be too, with at least just a couple hundred dollars at risk (which could very well end up ensuring they're "set for life" in just a few short years).

Anyway... man! What an amazing phenomenon, all of this is... to observe and actually be a part of!  

[BitDreams]

When I saw that article hit Reddit and various news sites I posted replies, tweets, blog posts and you're the first person who took the time to tell me I might not be alone in my thinking. Thank you for taking time to acknowledge that KeyJockey.

I've got 6 people hooked on bitcoin. Three are family and three co-workers. I heard about bitcoin soon after it was released and I said no to the concept of mining because I thought that it meant I had the 'dark-web' on my computer. It took me a while to get past that concern yet I believe there are still a majority of future users who are still in that 'you first and I'll see how it's working out' stage. Three cheers for early adopters!
 

[MahaRamana]

BTC probably can't go to zero any more, IMHO, since there's clearly a very solid "transaction utility" to the system as it works (very well!) today, and as many bitcoin evangelists often say, "The Blockchain Cannot Be Uninvented".

But transaction utility alone might be sustained even at current (or much lower) BTC prices... putting the kibosh on this $1M BTC idea?

Thoughts?

What makes bitcoin valuable is not the "transaction utility" but the synergy of "transaction utility" and "solid storage of value utility".
Bitcoin is absolutely great for both functions.

If more people and entities recognise this fact, the price can only rise.

Yes transaction utility could be met at the current price, but not the storage of value utility.

People have a need to transact, but they have a need to hold their wealth as well. Many people want or will want to diversify their holdings away from paper holdings such as fiat accounts, treasuries and stocks. This is especially the case at a time when the valuation of paper holdings is at an all time high relative to their fundamentals. And at a time when governments are passing laws to have the right to seize private funds to cover their liabilities to society.

[jeffersonairplane]

Well of course the level will start to drop off.

[KeyJockey]

...you're the first person who took the time to tell me I might not be alone in my thinking.
Thank you for taking time to acknowledge that KeyJockey.

Heh, no problem bro... but srsly I'm not tryin' to just butter anyone here, just tryin' to keep a level head and think clearly with accurate information about all of this stuff, which ain't easy sometimes with all the hype and freakouts and feints and good/bad info flying around out there, LOL

Anyway, in that spirit, I'd like to post a little update to my 10X numbers above. 

Somebody over on coindesk named "Arthur" posted a comment on another story recently and took the time to look up the actual numbers for various dates:

>>> To be more exact, the picture is this:
>>>
>>> Jan. 2009 -> Jan. 2010: $0.00 -> $0.01
>>> Jan. 2010 -> Jan. 2011: $0.01 -> $0.30
>>> Jan. 2011 -> Jan. 2012: $0.30 -> $4.70
>>> Jan. 2012 -> Jan. 2013: $4.70 -> $13.25
>>> Jan. 2013 -> Jan. 2014: $13.50 -> $735.00
>>>
>>> It goes from 3 times to 55 times, roughly.
>>> So this year might end between $2,200 and $40,425.
>>> But technical analysis, for those who think that means
>>> something, tell us that the $2,500 - $10,000 zone is
>>> more likely than the $40.000 zone. And there are, so far,
>>> no reasons to believe that the old high of $1,200 will not
>>> be broken this year.

...all of which is still a-okay for me, still fits reasonably well enough into THIS thread's premise.

10K this year?  No problem.  Nobody expects $40K this year.
That's the NEXT cycle iteration range, and just a little more time maybe needed for that (year or two following). 

Anyway, even if there are not 3X more iterations left to go and maybe only ONE more, it's still a damn good ROI, right? 

Where else in today's world do you have any possibility at all of getting ten times return on your money (for risk of maybe 1x loss)...?  The stupid banks are not paying anything (fraction of a percent? LOL) and while the stock market might still continue it's fake rise a bit longer, srsly doubt it can go on to hit another 10X increment...

[cuddaloreappu]

This is the my most favorite thread of this forum...wish the predictions here come true

[SlipperySlope]

This is the my most favorite thread of this forum...wish the predictions here come true

Thanks!

The theme here is more observation than prediction. We can make a guess about the trend and figure out what the consequences are in advance, should our guess prove true.

[SlipperySlope]

Tracking the 2014 Bitcoin Bubble - First Doubling

I am tracking the number of days it takes the bitcoin price to double. This is a proven indicator for determining when a bubble is peaking. There is academic research that quantifies the super-exponential growth during an asset price bubble, but the math is much simpler when counting days-to-double. Historically, the bitcoin price peaks when prices are on a pace to double in about a week.

The first doubling leading up to the next bubble took 51 days, which is the difference between $340 on April 10 and $680 on May 31.

I will be watching for . . .

Second doubling - $1360 (perhaps July)
Third doubling - $2720 (perhaps July)
Fourth doubling - $5440 (I think the late July peak will be near this value)
Fifth doubling - $10880 (probably will not happen unless the peak is in the fall)

The academic research is Fearless versus fearful speculative financial bubbles D Sornette, JV Andersen - International Journal of Modern Physics …, 2002

A significant quote from the highly cited paper . . .

The feature that distinguishes it [the model] from ordinary bubble models is that the solutions may be at some times growing “super-exponentially,” i.e., with a growth rate growing itself with time. This is fundamentally different from previous bubble models based on exponential growth (with constant average growth rate). This suggests to qualify bubbles by testing for the existence of nonlinear super-exponential growth.

[lyth0s]

Tracking the 2014 Bitcoin Bubble - First Doubling

I am tracking the number of days it takes the bitcoin price to double. This is a proven indicator for determining when a bubble is peaking. There is academic research that quantifies the super-exponential growth during an asset price bubble, but the math is much simpler when counting days-to-double. Historically, the bitcoin price peaks when prices are on a pace to double in about a week.

The first doubling leading up to the next bubble took 51 days, which is the difference between $340 on April 10 and $680 on May 31.

I will be watching for . . .

Second doubling - $1360 (perhaps July)
Third doubling - $2720 (perhaps July)
Fourth doubling - $5440 (I think the late July peak will be near this value)
Fifth doubling - $10880 (probably will not happen unless the peak is in the fall)

Those predictions would make this one hell of an exciting year! Do you have any good sources for the bubble peaking when doubling price is in 1 weeks time?