Giovanni Santostasi, a former physics professor, has brought attention back to his “power law” model for predicting the price of Bitcoin (BTC), which forecasts a value of $10 million per BTC by 2045.
The power law is a mathematical relationship where one value is proportional to a fixed power of another value. This law has been observed in various natural phenomena, from earthquake frequencies to stock market dynamics.
Santostasi initially introduced the power law model on the r/Bitcoin subreddit in 2018. However, it gained renewed interest in January of this year when finance YouTuber Andrei Jeikh mentioned it in a video to his 2.3 million subscribers.
According to the model, Santostasi predicts that Bitcoin could reach a peak of $210,000 in January 2026, followed by a drop to as low as $60,000.
During a discussion on March 2 with mathematician and Bitcoin investor Fred Krueger, Santostasi explained that the power law model offers a more comprehensible and predictable representation of Bitcoin’s price movement over long timeframes. In contrast, short-term Bitcoin price charts commonly used in mainstream media often present a chaotic and inaccurate view.
Santostasi clarified that the power law is logarithmic, unlike the now widely criticized stock-to-flow model. Under the power law, Bitcoin’s price doesn’t have to consistently increase over time, and significant price fluctuations, as seen between 2020 and 2023, can still be explained.
In a subsequent post on March 3, Krueger further expanded on the mathematical modeling of the power law applied to Bitcoin. His analysis predicted that Bitcoin would reach a price of $100,000 within the next two years.
Krueger additionally projected that if Bitcoin adheres to the power law model, its market cap would surpass that of gold by 2033, with each Bitcoin token valued at $1 million.
Despite the belief of Santostasi and Krueger in the power law model, critics argue that any mathematical model is susceptible to significant errors and does not account for random events that could heavily impact the price.
Source: X