Topic: Bitcoin Price Mathematical Prediction Model (Read 112 times)
Hi, Bitcoin forum!
I want to share a unique mathematical formula, which models the bitcoin price precisely for more than 10 years before and more than 10 years after today. Believe it or not, but there is a simple formula to calculate the future bitcoin price with great accuracy.
want to know the price for Bitcoin — take your scientific calculator and calculate it:
https://media.licdn.com/dms/image/C5112AQF6QmkO3euLzA/article-inline_image-shrink_1500_2232/0?e=1577923200&v=beta&t=aTGswo_am4X5zjgPjMuCmouFuMGf7oBXZuyelEjeWWU
or more advanced version, which includes waves:
https://media.licdn.com/dms/image/C5112AQFotZjk-T0EOA/article-inline_image-shrink_1500_2232/0?e=1577923200&v=beta&t=8z2wmh4zXPUO2B3mSS1bbk5usA5CkZvmKoHqll357CA
Where t — the number of days since the Bitcoin Genesis block.
Dear friends, colleagues, clients, and enthusiasts!
By this article, I want to congratulate every one of you with the CRYPTO SUMMER coming back again after long months of crypto winter and very short recent crypto spring!
I know that all of you saw this diagram millions of times in your bitcoin journey. What is the orange line in this chart? Of course, many people will easily recognize the BTC-USD price chart.
But let me add to this diagram some mathematics the way that probably nobody did with this chart.
I took all available data since July 2010. The bitcoin price was 5 cents per one BTC! Yes, you could easily buy 20 BTC per dollar in July 2010!!! All you had to do was to find some of the few smart guys who called themselves “bitcoin miners” and offer them some “real money” in exchange for their strange “fake money” — Bitcoin. They needed this money to buy equipment and to develop the blockchain further. I wish I were that smart then!
Anyways, let me go straight to the simple formula for this blue trend-line on the chart above:
Bitcoin long term trend-line formula (the two forms are equivalent to each other):
https://media.licdn.com/dms/image/C5112AQFMlc3lZgEyyA/article-inline_image-shrink_400_744/0?e=1577923200&v=beta&t=n05n7RQJGUDUk3_VO-rCOcE_S051m5iEz9Tkd8WHyXk
or
https://media.licdn.com/dms/image/C5112AQEc15f11QmyvQ/article-inline_image-shrink_400_744/0?e=1577923200&v=beta&t=wxmza_4woOC_aJV4Z79LkqkC-WagpwGoz39UWoLdQgo
or
https://media.licdn.com/dms/image/C5112AQERFBn99NzFfw/article-inline_image-shrink_400_744/0?e=1577923200&v=beta&t=kEfvKcsAj10EYP0ufTYB5O_cny6LYnOgGTdY7Q_IsbY
Where:
BTC — BTC to USD exchange rate
t — the number of days since January 3, 2009 (the Bitcoin Genesis block date)
All three formulas represent the same curve and just written differently. The first form explains the logarithmic shape of the trend-line curve, while the other two are easier to use for computations. You may use whichever form is more convenient.
Here is the chart with the trend-line plotted:
https://media.licdn.com/dms/image/C5112AQEW7Geaq3HJew/article-inline_image-shrink_1500_2232/0?e=1577923200&v=beta&t=1rPZu0dCttrNgTARxYQzHYjMZrN4h2hEf1OWRwRva14
This is by itself a very powerful formula indeed! You may now model the price trend for years ahead!
Just as an example. For July 1, 2019 the trend value for bitcoin would be… Please use your scientific calculator to check it out:
https://media.licdn.com/dms/image/C5112AQFiDFZr5h3d_A/article-inline_image-shrink_1000_1488/0?e=1577923200&v=beta&t=WiXyViLIMWuu7LdmLzVVkLO4h4nn3tTKiYDmlFJ-MK4
We are almost there!
3831 days passed from the bitcoin genesis block till July 1, 2019 (that is about 10.5 years).
Another example. For July 1, 2022 the approximate value for bitcoin, based on the trend model, would be…:
https://media.licdn.com/dms/image/C5112AQGEEWhwTkMJVQ/article-inline_image-shrink_400_744/0?e=1577923200&v=beta&t=HjkI9n4kntGyTzHtEAkoZfUn0u46s_80ACNKuOTPdkc
The next step would be to model analytically the waves in observations. Of course, the waves have strong fundamentals due to halving changes. However, for this analysis, I will only focus on the shape of the curve and will model it with some nonlinear functions. After a few sleepless nights I came up with this “single line” analytical model:
https://media.licdn.com/dms/image/C5112AQHSNmC-sJHNrQ/article-inline_image-shrink_1500_2232/0?e=1577923200&v=beta&t=xQYNGSzXwT2U6CGxtiltC7aFWzQKPwrPMEA8a6XaAls
Isn’t it beautiful? I know, some would shout at me “such a crap…” And you might be right this formula may look scary. However, this would be a fun mathematical exercise for some of my math students whom I used to train for the International Mathematical Olympiad (https://www.imo-official.org/). I do believe that teaching this formula in high schools would increase the interest in learning the blockchain and its implementations to the new crypto economy and will help students understand the crypto world much faster.
Now let’s see how this model fits the actual historic data!
https://media.licdn.com/dms/image/C5112AQGJmta-ixrc7A/article-inline_image-shrink_1000_1488/0?e=1577923200&v=beta&t=eSLiZU1TylanaDrQ7sOaJqN96Y_847rLdLQynrFTrUk
Many researchers drew a line like this one “by hand”. Many used the fractal structure to model the next wave. In my research I fully agree with this approach since there are no signs that the past does not model the future in this case. It surely does. In terms of the shape, I do not think this shape will be a surprise for most of you. I just want to add a touch of math to these expectations and make it easier to explain to our friends why we do believe in bitcoin and that it will soon hit 100K in a matter of 1 or 2 years. No more manual redrawing for the trend. Now we have THE FORMULA! You are free to use it for your research.
By the way — do you want to see what the model predicts for the next couple of years?
I bet you do! So, let’s run the model. Please note that this chart is on a linear scale, that is why the trend line is concave upward. That is that long term “parabolic trend”:
https://media.licdn.com/dms/image/C5112AQFOQxUc2WdExw/article-inline_image-shrink_1500_2232/0?e=1577923200&v=beta&t=KvRyuAMl0q7sgr3H_ePuvAVeDt7Yomv2LIp-QqO1S48
Here is how the model looks in the 2-year time frame at the time of writing (July 25, 2019) when BTC just hangs between 11K-12K. The blue line is the all-time trend. The green line — is the wave model. It looks like the price wants to jump off the prediction model up to the long term trend! Such a spectacular drama isn’t it? Let’s see what may happen next.
The next 7 years predictions for the bitcoin price:
https://media.licdn.com/dms/image/C5112AQFF8kjpczwIjg/article-inline_image-shrink_1500_2232/0?e=1577923200&v=beta&t=6Mdwunt1YDPmeeOFgG94t7NQXzOjY9jXA6Dz2_FSl0o
As you may see the model predicts the BTC price to hit 100K somewhere between year 21–23.
And the disclaimer:
The model presented in this article is just for educational purposes to popularize the crypto economy and the power of nonlinear mathematical modeling. You should not make your investment decisions based on this model — use your judgment responsibly and enjoy the math of crypto!
PS : I didnt wrote it -> LINK TO THE ORIGINAL ARTICLE : https://www.linkedin.com/pulse/bitcoin-price-mathematical-model-bitcoinformula-lev-umanov/
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