The author behind the Bitcoin pricing model based on Metcalfe’s law says the standard cryptocurrency will likely be priced around $ 12,000 by the end of November and reach $ 1 million within the next decade.
In a Twitter thread on October 11, Timothy Peterson, Director of Global Macro at Cane Island Alternative Advisors, said “90% chance that Bitcoin will never close below $ 11,000 again”. Disclaimer: Although he takes his opinion very seriously, but reminiscent of the meme reminder predictions of the “last chance” to buy Bitcoin under $ 10K, which is often proven false.
However, the analyst asserts that the model he created in 2017 is more or less accurate so far. Peterson claims to have successfully predicted the year-end price of cryptocurrencies for the past two years. For 2018, he predicted the price would be $ 3,500 – the actual price as of December 31 was $ 3,782, a difference of just 7%. Peterson has also predicted $ 7,000 for the end of 2019. Bitcoin’s recorded price was $ 7,243 on that date.
Using these methods, the analyst estimates that Bitcoin (BTC) will be valued at $ 100,000 in January 2024 and $ 1 million by March 2028. He also made a very specific prediction about the main price. on 30 November for those who doubt the accuracy of the model.
Bitcoin’s supply is easily identifiable – over 18.5 million coins as of press time – and Peterson believes demand can be measured by the number of BTC wallets. Using this information, Peterson created a price model based on Metcalfe’s law and showed that the value of a communication network is proportional to the square of its number of users. In the case of Bitcoin, the price will be proportional to the square of the number of users holding BTC on the blockchain. In essence, BTC becomes more valuable as its adoption increases. “Metcalfe’s law is a mathematical and scientific basis, like gravity and E = mc2,” says Peterson.
Peterson’s “Lowest Price Forward (LPF)” model competes with the most popular Bitcoin pricing model, stock-to-flow (S2F), created by renowned analyst PlanB. Who predicted that Bitcoin price would reach $ 288,000 in the next halving.
However, ByteTree co-founder and chief investment officer Charlie Morris recently dismissed the accuracy of the S2F model. Morris argues that since Bitcoin’s supply is fixed, demand is more likely to determine price, and points out that the economic role of Bitcoin miners is decreasing over time.
“There are many reasons why the Bitcoin price could go up or down,” Morris said. But S2F is not one of them. ”
Peterson’s 7,718 Twitter followers were inferior to PlanB’s 139,200 followers, so his message may not have reached the reach of S2F. Despite their differences, both price prediction models point to a bullish future for Bitcoin.
“You’re going to see some amazing things happen with Bitcoin in 2021,” said Peterson.