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Author Topic: [prediction] Next spike $560,000 14 {<-oops!} months from now (2017 Update!)  (Read 69399 times)
sgbett
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September 27, 2014, 09:14:09 PM
Last edit: July 06, 2017, 10:33:59 AM by sgbett
 #1

After last nights excursion into how bitcoin adoption plays out, I played around with some charts. Broadly based around these concepts.

A. There is an underlying sigmoid function (wikipedia'd that one!) that drives base valuation - the adoption curve.
B. That the market price is some cyclical function underpinned by the base valuation (A).
C. We end with widespread adoption after about 10 years, representing a base value of BTC based on some percentage of the economy. I picked risto's $300k because its as good a figure as any Smiley

If you use the function tan^-1 to model the s-curve
If you use some function such as sin to model a cycle

Then all is left to do is set up some start and end points, and mess around with modifiers to amplitude and frequency of the cyclical input, and rate of adoption of S-curve.

After trying out a variety of values it became obvious this was just an exercise in throwing darts Smiley - if it wasn't already obvious this is not a method of trying to predict highs and lows so you can trade your way to victory. It is more an exercise in preparing mentally for the magnitude of movement that one might expect were these assumptions of mass market adoption true.

It became clear, that it doesn't matter what values you put in. There is always some point where, despite how incredible/insane you think BTC price has been up to know, it pales compared to what it would need to do to fulfil this kind of projection.

No matter how you try to tame this model, doing so makes early movements far too placid.

Eventually I settled on a model that roughly followed the trend up to $1200ish with a sell off to about $400, then zoomed out to see how those parameters unfold over the 10 year adoption curve.

I got this...



I though this is ridiculous, it can't possibly happen. Then I thought, how else *could* it happen.

*if* it is ever to go mainstream. like a serious part of the world economy mainstream, there has to be a tipping point. Up until now the whole bitcoin market cap has been toy money compared to the kind of numbers that are thrown around when people start talking about things like the money supply, and absolute chicken feed compared to things like derivatives.

There has already been talk that the most recent price spike was 'the last time'. People claim everybody already knows about bitcoin, its all over now. I think this is nonsense. If I go out in the street and do a spot survey on people, your answers range from "oh yeah I think i heard of it on the news one time" to "huh?". The man in the street does *not* know about bitcoin. Anyone claiming they do is merely demonstrating their embarrassingly limited world view. Maybe every one of your online mates knows about it, but bitcoin isn't WoW gold. In a 'success' scenario - widespread adoption - it's slightly more relevant on a global IRL scale.

Wall st has indeed come. Its just that people are looking at things from the wrong angle. Wall st is part of the infrastructure that is currently rising up, such that once everyone notices what has happened. It's already happened.

To get to 300k we have to get through 3k and 30k. When the world's eyes turn to what bitcoin has become, then there will be no orderly queue, and understandable rise. It will be full on (mask) hysteria. The rise to 32 was when the neck beards were buying into a 7200BTC per day production. The rise to 266 was the first wave of internet interest, the rise to $1200 was a continuation fuelled the rest of the plugged in generation. It made the MSM which may have fuelled a little speculation. That's when things got serious.

Governments have noticed it, powerful people have noticed it, *banks* have noticed it. Right now we are in a perfect storm of the aftermath of a huge overshoot on the purchase of mining equipment - this is *fact* as evidence by the hash rate/difficulty.

This will take time to unravel. It surely will though, as irrational as people are, they will eventually stop flushing money down the mining drain. That money will turn towards the supply. As it becomes obvious the bottom is in, that is when people will start the next run up. Only this time it isn't going to be just neckbeards, redditors, hipsters and anonymous, it will be institutions. That have pretty much unlimited buying power by virtue of them essentially being able to print their own money, because they are TBTF and will just keep bankrolling each other whilst nuzzling the teat of QE washing away their toxic assets.

So the move will be unprecedented.

Unprecedented to you and I and all the other peons around here. To those behind the move, they just spent a few hundred millions to acquire assets they can now assign book values of billions. Selling into this only makes you weaker in the end game, and selling is what they want you to do because those dollars you are acquiring get more worthless the more bitcoin they have. Who here though has the constitution to hold as they see the price double repeatedly. We are still at the end of the day all hardwired for fiat. As much as anyone pretends they are not.

So the number I have picked is probably not that accurate. The magnitude, and the colossal unbeleivableness of it, is what is important. That's the black swan that nobody sees coming. That 90% of the people in the world will miss 90% of the bitcoin.

I repeat this exercise is about being ready if this happens. About having thought about what you are going to do. Me personally, I don't pretend for a second I can hold tight to everything. I'll sell a little on the run up just like a have every other time, and just like every other time, I will regret the stuff a sold a week earlier for far less. Just like every other time, when the dancing is done I'll reflect about how I used to have soooo many more bitcoin. Just like every other time, I will have made my end game worse.

I won't have sold everything though.

That's the difference between this post and every "talking your book but pretending not to" post on here. Everyone knows I'm long, I'm not telling anyone to go all in or all out I don't think posts on here make the slightest bit of difference, we are way beyond that now. The train has left the station and the driver is still drunk in the station bar. I'm just chatting to people about what I think. Getting more responses and replies from people who have other ideas and using this to shape my future decisions.

I'm already well past caring about whether I *lose everything* because for a long time now that's been impossible. The fact that people are up on here posting "advice" to sell is even more ridiculous to me than the suggestion that btc will be worth over half a million in just over a years time.

For the record, yes that chart does say over  1m in 3 years. It also says 250k the year later. It absolutely terrifies me to think how one might ride that out. Once again the figures aren't right, its the magnitude of the moves you might have to go through that is the message.

"A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution" - Satoshi Nakamoto
*my posts are not investment advice*
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MoreFun
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September 27, 2014, 09:15:05 PM
Merited by sgbett (1)
 #2

It's so clear you are saying "Fuck you" with this chart.
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September 27, 2014, 09:48:56 PM
 #3



TL;DR
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September 27, 2014, 10:02:41 PM
 #4


hodl, definitly hodl  Wink
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September 27, 2014, 10:17:14 PM
 #5

Hear hear

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My sig space is not for sale.
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September 27, 2014, 10:44:25 PM
 #6

Thank you, I'm going to read this every night before I go to bed.  Grin
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September 27, 2014, 10:54:54 PM
 #7

Thank you, I'm going to read this every night before I go to bed.  Grin
Just don't sell all your coins in your dreams cause you will crash the market.
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September 27, 2014, 10:55:26 PM
 #8

I love you OP. A bit of optimism is welcome in these grim time.
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September 27, 2014, 11:21:21 PM
 #9

Nice post. Could you post some model output on a log chart? Including hindcasting?

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September 27, 2014, 11:24:19 PM
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I'd prefer buy low sell high. :-)
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September 27, 2014, 11:33:02 PM
 #11

We'll hit 10k any day now.

Bitcoin is super impressive, and everyone and their grandmothers are jumping aboard this rocket.
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September 28, 2014, 12:29:01 AM
 #12

It's crazy to think about what a wild ride it could be!

I can imagine a point where their is a perfect storm of things. Bitcoin becomes commonly known and credible because it's been around for long enough, it has become user-friendly and accessible enough, we have a few more financial crisis' throughout the world, etc. Once we get the combination of a few or all of those things, the run up in price could just be completely insane!
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September 28, 2014, 12:32:22 AM
 #13

The described scenario is theoretically possible, but can occur only if there is a crash in other currencies or financial markets.
People seems to be quite content with using fiat. Why would they change, except in special cases, like sending money?
What is the impetus for every day use?
If all mined coins are sold (just for the sake of argument), then it results of $526 mil being sold into the system per year.
There are only four funds that are buyers and these are relatively small funds. The only other buyers might be large family offices.
In a personal example, I am a relative enthusiast (I accumulate, mine, etc.), however I don't use bitcoin for much of anything because it seems silly to exchange it for goods (other than miners) at the current super low prices with me putting up quite a lot of cash getting measly btc at the moment. None of my family have used bitcoins for anything, even if they are fully aware of bitcoin from my interest. I am quite sure that this situation is rather typical.
Perhaps, we are too impatient and it will take years/decades for usage to improve, but the last 11 mo has been a general disappointment: too much talk about esoteric usage (Etherium, etc) and too little improvement in day-to-day activities (wallets, security, etc.).
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September 28, 2014, 01:00:38 AM
 #14

What is the impetus for every day use?

this will become clear once bitcoin leaks into the supply chains.
merchants can offer discounts for bitcoin, just because of the customer->merchant transaction.
there are savings to be made all the way up that supply chain.
they would have the advantage over their competitors.
consider this, I can buy something from an online merchant in france, the chinese supplier could have a replacement order on file and received payment within one or two hours.
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September 28, 2014, 01:09:23 AM
 #15

What is the impetus for every day use?

this will become clear once bitcoin leaks into the supply chains.
merchants can offer discounts for bitcoin, just because of the customer->merchant transaction.
there are savings to be made all the way up that supply chain.
they would have the advantage over their competitors.
consider this, I can buy something from an online merchant in france, the chinese supplier could have a replacement order on file and received payment within one or two hours.

newegg started with the 10% discount, but don't have it now. Why? Perhaps, credit cards issuers had a word with them?
Do you know that many stores are not allowed to sell the same goods for a cash discount vs credit card? This (pressure form credit cards issuers) ought to be illegal.
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September 28, 2014, 01:14:02 AM
 #16

The described scenario is theoretically possible, but can occur only if there is a crash in other currencies or financial markets.
People seems to be quite content with using fiat. Why would they change, except in special cases, like sending money?
What is the impetus for every day use?
If all mined coins are sold (just for the sake of argument), then it results of $526 mil being sold into the system per year.
There are only four funds that are buyers and these are relatively small funds. The only other buyers might be large family offices.
In a personal example, I am a relative enthusiast (I accumulate, mine, etc.), however I don't use bitcoin for much of anything because it seems silly to exchange it for goods (other than miners) at the current super low prices with me putting up quite a lot of cash getting measly btc at the moment. None of my family have used bitcoins for anything, even if they are fully aware of bitcoin from my interest. I am quite sure that this situation is rather typical.
Perhaps, we are too impatient and it will take years/decades for usage to improve, but the last 11 mo has been a general disappointment: too much talk about esoteric usage (Etherium, etc) and too little improvement in day-to-day activities (wallets, security, etc.).

This is not about using fiat or not.

Why would they change you ask?

Cause the value of the thing is fucking skyrocketing! Greed will fuel this ride, everyone will want to board this train. When it becomes obvious that there is nowhere for this thing to go but up EVERYONE will want in.

It makes to sense to suggest mined coins would be sold into the market. In a bull market, with Bitcoin going up with no stop in sight, miners will hold onto their coins.

Your family is a perfect example of this. I'm sure you have spoken to them at length of Bitcoin and all its promises. Right now they're probably like  Roll Eyes but when the next rally begins and you'll be making 100s if not 1000s of dollars everyday they'll be begging for some bitcoins.

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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September 28, 2014, 01:18:33 AM
 #17

stores are not allowed to sell the same goods for a cash discount vs credit card

well then they'll just be making more money of each bitcoin sale.
if enough % of sales are bitcoin, they can sell at lower prices vs competitors
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September 28, 2014, 01:20:43 AM
 #18

What is the impetus for every day use?

this will become clear once bitcoin leaks into the supply chains.
merchants can offer discounts for bitcoin, just because of the customer->merchant transaction.
there are savings to be made all the way up that supply chain.
they would have the advantage over their competitors.
consider this, I can buy something from an online merchant in france, the chinese supplier could have a replacement order on file and received payment within one or two hours.

newegg started with the 10% discount, but don't have it now. Why? Perhaps, credit cards issuers had a word with them?
Do you know that many stores are not allowed to sell the same goods for a cash discount vs credit card? This (pressure form credit cards issuers) ought to be illegal.

You fail to see the big picture.

Everyday use of Bitcoin as a currency/means of exchange is not required to attain the heights suggested by OP.

Until we get to mainstream adoption, these aspects of Bitcoins are just bells and whistles.

What will drive the next rally is what has driven each previous bubble : speculation.

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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September 28, 2014, 01:30:06 AM
 #19

The described scenario is theoretically possible, but can occur only if there is a crash in other currencies or financial markets.
People seems to be quite content with using fiat. Why would they change, except in special cases, like sending money?
What is the impetus for every day use?
If all mined coins are sold (just for the sake of argument), then it results of $526 mil being sold into the system per year.
There are only four funds that are buyers and these are relatively small funds. The only other buyers might be large family offices.
In a personal example, I am a relative enthusiast (I accumulate, mine, etc.), however I don't use bitcoin for much of anything because it seems silly to exchange it for goods (other than miners) at the current super low prices with me putting up quite a lot of cash getting measly btc at the moment. None of my family have used bitcoins for anything, even if they are fully aware of bitcoin from my interest. I am quite sure that this situation is rather typical.
Perhaps, we are too impatient and it will take years/decades for usage to improve, but the last 11 mo has been a general disappointment: too much talk about esoteric usage (Etherium, etc) and too little improvement in day-to-day activities (wallets, security, etc.).

Cause the value of the thing is fucking skyrocketing!

really? it was skyrocketing in 2013, now drowning like a toy ship (last 11 mo). Roll Eyes
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September 28, 2014, 02:52:37 AM
 #20

I'll take it. This gives me plenty of time to accumulate.
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