Bitcoin’s Price Prediction: A Comparison Between Michael Saylor and the Rate of Adoption Model
As the cryptocurrency market continues to evolve, investors are eagerly seeking insights into the future performance of Bitcoin (BTC). Recently, Michael Saylor, CEO of MicroStrategy, made a bold statement regarding Bitcoin’s potential growth over the next 21 years. According to Saylor, Bitcoin will grow at an average annual interest rate of 29% and reach $13 million by 2045. In this article, we’ll delve into Saylor’s prediction and compare it with the Rate of Adoption model, a sophisticated tool developed by Daniele Bernardi, Founder of Diaman.
Michael Saylor’s Prediction
Saylor’s statement is indeed a bold one, leaving many wondering about its validity. He emphasized that every Bitcoin not bought will cost $13 million in the future. This prediction is based on his assumption that Bitcoin will continue to grow at an average annual interest rate of 29% over the next 21 years.
The Rate of Adoption Model
Daniele Bernardi’s Rate of Adoption model correlates Bitcoin’s price with the growth rate of non-zero wallets, which contain at least a fraction of Bitcoin. This model was first presented by Bernardi in February 2020 at the Quant Workshop Conference and has since been updated to reflect current market conditions.
The model predicted the 2021 peak at $63,000, slightly below the all-time high of $67,000 in October 2021. In 2023, Bernardi updated the model and published the results in Cointelegraph, forecasting a price of $130,000 for the current cycle. With the approval of Bitcoin ETFs in the United States and the simultaneous promotion by 11 companies, the parameters have changed.
Recalculating the Model
Bernardi had planned to recalculate the model in autumn 2024, but with the recent developments, he has decided to estimate Bitcoin’s price for 2025 before it likely enters the next crypto winter. The recalibrated model provides a more accurate prediction of Bitcoin’s potential trajectory.
Comparison Between Saylor’s Projection and the Rate of Adoption Model
Saylor’s projection assumes an average annual return over the next 21 years, while the Rate of Adoption model uses a more sophisticated power law approach. This method relates the average price per wallet to the number of non-zero wallets in circulation, multiplying these variables to derive the expected market capitalization of Bitcoin.
The chart below illustrates the price of Bitcoin and its power law describing its trend over time.
Bitcoin’s Potential Trajectory
As illustrated in the chart above, our calculations indicate that by 2045, Bitcoin’s price could reach $8.3 million on the median curve. On the higher curve, driven by the semi-exponential surge marking the end of each bullish cycle, it could exceed $21.6 million.
Investment Advice
It is essential to remain aware of Bitcoin’s potential trajectory, as the market is filled with individuals who settled for gains of +60% or +100%, only to exit too early and miss out on subsequent extraordinary price increases.
While Saylor advocates holding Bitcoin indefinitely, it is crucial to understand that this approach may not be suitable for everyone. It’s recommended to hold onto Bitcoin for as many years as possible or until it becomes clear that it will be replaced by something more attractive and functional (which, as of today, does not exist).
2025 Forecast
Considering the increased adoption driven by Bitcoin ETFs, the 2025 forecast for Bitcoin’s peak price is $261,000, nearly double the previous estimate.
Current Dynamics
The chart above shows that even with Bitcoin hitting all-time highs, we are still far from the upper boundary projected to mark the relative peak for 2025.
Insightful Phrase
As Bernardi concludes, "Everyone gets the Bitcoin price they deserve."
Conclusion
In conclusion, while Saylor’s prediction is certainly bold, it is essential to consider multiple perspectives and models when evaluating Bitcoin’s potential trajectory. The Rate of Adoption model provides a more sophisticated approach, taking into account the growth rate of non-zero wallets.
As investors, it is crucial to conduct thorough research and analysis before making any investment decisions, ideally with a qualified financial adviser who can guide you on the appropriate allocation within your portfolio.
About the Author
Daniele Bernardi is a serial entrepreneur and founder of Diaman, a group active in investment management, software development, and crypto activities. He was recognized as an ‘Inventor’ by the European Patent Office for his work on a system for managing cryptographic keys.
Disclaimer
The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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