A different perspective on Bitcoin's price development: Logarithmic Growth

[Kryptowerk]

As someone that is not really interested in technical analysis and drawing fancy lines in charts all day, every day, I still decided to make this post.
The main reason is to give all the newbies that might have been burned during the last months a different, long-range perspective on Bitcoin.
And I also think this is in general an interesting perspective for everyone interested in Bitcoin price analysis with a focus on larger patterns.

Here is the excellent article by "Awe & Wonder": https://medium.com/coinmonks/bitcoins-logarithmic-growth-rates-facebook-s-s-curve-and-future-projections-22d8acaaa801

Some important quotes:
"According to Willy Woo, the space is currently somewhere in the early adopters phase."

"Currently, for every 1% increase in time there is a corresponding 5.87% increase in price.
Again, similar to Facebook’s adoption S-curve, BTC is increasing in price at a decreasing rate."

Currently Bitcoin's price is almost 50% below its logarithmic trend line!
So stay cool and hodl. My opinion. (Not financial advice, I am not a financial advisor)

As always I would encourage to make the best investment you can, by educating yourself about cryptocurrency, blockchain and Bitcoin. Andreas Antonopoulos would be my #1 go-to-point here: https://www.youtube.com/channel/UCJWCJCWOxBYSi5DhCieLOLQ

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[o_e_l_e_o]

An interesting graph for sure, but as with all retro-fitted charts, it's only true until it isn't. I can fit 100 different curves, lines, wedges and triangles to the recent bitcoin price movements which mean nothing at all.

Still, using this graph, we've only really fallen below the lower 50% confidence interval twice in the past, and on both times it has taken years before a recovery to above the mean. The first time in 2011 took about a year and a half, and the second time in 2014 took about two and half years. If we are following this pattern, although we might see some slow general upwards trends in the price over the next few years, it will be in to the 2020s before we reach 20k again.

[messito]

a lot of predictions about the price of bitcoin, but it is time to understand that no one technically and fundamental analysis works in this market

[Kryptowerk]

a lot of predictions about the price of bitcoin, but it is time to understand that no one technically and fundamental analysis works in this market

Even though I agree with the fundamental sentiment, that Bitcoin is not just another asset class that can be easily compared, there are some fundamental similarities with Amazon or Facebook in regards of adotion and corresponding value.
The logarithmic growth model is - even based on logic alone - much more realistic than any exponential models.

However, I personally believe we might deviate heavily from it, when there will finally be a flood of merchants and services coming in, adopting BTC as their payment option. When Lightning Network is out of beta alpha, then this could create another short-term exponential rush into BTC.
Interesting times ahead!

[o_e_l_e_o]

When Lightning Network is out of beta alpha, then this could create another short-term exponential rush into BTC.

I respectfully disagree. The vast majority of people who aren't involved in bitcoin don't understand how bitcoin works. Hell, the majority of people who are involved with bitcoin don't understand how it works. People on this forum and reddit/medium/steemit/etc. might get swept up in the hype surrounding LN, but I doubt it will make a significant impact on widespread adoption. We already had an extended period of very cheap fees and rapid confirmations, and the price continued to fall throughout. Sure, LN is going to help long-term, but I don't think its release will cause a short-term rush, as you put it.

[hugeblack]

When Lightning Network is out of beta alpha, then this could create another short-term exponential rush into BTC.

I respectfully disagree. -snip-

What does BitcoinCash have to offer to crypto users? What is the thing offered by altcoins? It's certainly low fees and quick confirmations.
People do not care about technical aspects or how to distribute decentralization, but when they want to buy a cup of coffee it does not take to wait a quarter of an hour with increased fees due to the numbers of input "many input addresses and one output."
When LN is activated, the real value of all altcoins is zero and therefore the price will increase. "Impact on the short-term"
in addition to the long-term impact

[1Referee]

When Lightning Network is out of beta alpha, then this could create another short-term exponential rush into BTC.
Interesting times ahead!

LN = utility, not a short term price booster. In a space as driven by speculation as crypto, use picks up very slowly. I wish it was different, but we can't change the way most people here think. By the time LN actually starts affecting the price, people won't even notice it's LN's utility doing it. In their mind it's probably this or that shitty institution entering the space by offering empty products we don't even need.

Most of the growth as always comes from idiots buying into the market because the price is going up, further inflating it to insane levels, then we're going back to levels that are easy to support and people consider healthy enough.

[Pursuer]

although the logarithmic chart that has been around for a couple of years now has been accurate about predicting the price of the bitcoin but I still believe that we are on an S-like curve and all of this falls on the horizontal line of this curve even if it sometimes starts looking like a big vertical rise.
my main reason is the lack of adoption of bitcoin. so far a tiny portion of the world (possibly less than 1%) have adopted bitcoin and we are still being slowed down from all sides as they put speed bumps on the road towards mass adoption. and when that happens we can see how insignificant all of this has been so far when the true vertical line appears.

[Kryptowerk]

When Lightning Network is out of beta alpha, then this could create another short-term exponential rush into BTC.
Interesting times ahead!

LN = utility, not a short term price booster. In a space as driven by speculation as crypto, use picks up very slowly. I wish it was different, but we can't change the way most people here think. By the time LN actually starts affecting the price, people won't even notice it's LN's utility doing it. In their mind it's probably this or that shitty institution entering the space by offering empty products we don't even need.

Most of the growth as always comes from idiots buying into the market because the price is going up, further inflating it to insane levels, then we're going back to levels that are easy to support and people consider healthy enough.

Thanks for your input. Definitly not saying LN is a short term booster or "short term" in any sense. Just thinking that, once the negative sentiment against crypto and BTC has passed in mainstream media, they might actually start reporting about Lightning Network which again could cause a temporary boost.

Anyway, regarding price, it will be very interesting to see what will happen *if* the current traditional markets do indeed start to crash (stocks and real estate). I think nobody can make accurate predictions how this will influence the market. My guess is, the crypto market will go down with it and - maybe - recover much earlier or after a few months will be recognized as a hedge.
Anyway, it's all speculation, only thing I am certain about: cryptocurrency, namely Bitcoin, is here to stay. No matter how it will be valued in fiat, you cannot undo the idea of a decentralized, censorship-resistant, borderless medium of exchange.

[pixie85]

I've seen this theory before and fully support it. If we stay in this channel we won't see $1000 ever again, but still could go lower than 4000. Anyway, it would still be a great progress for Bitcoin, despite what some people might think. This curve is very common among inventions that slowly gain acceptance. We shall see if Bitcoin continues to go along it in 2019, but with bakkt, etf, and halving getting closer we should expect it.

[1Referee]

Anyway, regarding price, it will be very interesting to see what will happen *if* the current traditional markets do indeed start to crash (stocks and real estate). I think nobody can make accurate predictions how this will influence the market. My guess is, the crypto market will go down with it and - maybe - recover much earlier or after a few months will be recognized as a hedge.

I expect crypto to go down with it as well, mainly because of the fact that traditional investors have a different mindset towards crypto. People here might think that it's a safe haven, but when big money being able to move the market thinks otherwise, they will make you feel that you can say goodbye to your safe haven, at least in the very short term.

Crypto is mainly a smaller allocation in the portfolios of traditional investors, and they are way more likely to dump crypto first when things start to look bad.

Anyway, it's all speculation, only thing I am certain about: cryptocurrency, namely Bitcoin, is here to stay. No matter how it will be valued in fiat, you cannot undo the idea of a decentralized, censorship-resistant, borderless medium of exchange.

Absolutely. In the end, we're only one major crisis away from people understanding why Bitcoin has value in the first place.