I'm curious, for things where this model applies. Do we expect the overshoot that will happen at the saturation point and the following overcorrection be relatively larger or smaller than the overshooting/overrcorrectios along the growth path?
I'm asking because no-one will ever really know when we've reached the saturation point (and no further exponential rise is coming) until it happened.
I'm asking because no-one will ever really know when we've reached the saturation point (and no further exponential rise is coming) until it happened.
I agree with many here who think that the bitcoin price bubbles are becoming less severe percentage-wise - so perhaps the final overshoot will be smaller than those that preceded it.
Yes, I have noticed the same thing, and that is a possibility (less volatile bubbles over time for what I will call your "speculative adoption" logistic curve)
But I'm getting at a different question. As I understand it, your model is tracking "speculative adoption" for lack of a better word. I understand why you are doing this, as the first "ultimate ATH" for BTC will almost certainly be driven mostly by speculation - as we are seeing now. This will take us quickly to some maximum price (eg. $1M). I/we expect that this "speculative adoption" will be far ahead of "utility adoption" which will probably lag significantly. Most new technology adoption models (I've posted a few here over the years) suggest that when the "speculative adoption" gets far ahead of the "utility adoption" a massive speculative correction often takes places over many years to bring the price back into alignment with current fundamental value. This is a different phenomenon than the mini bubbles on the way up the logistic curve. This seems to me would indicate the underlying model stops working at this point. This might suggest that once hitting $1M btc (for example) will drop back tremendously to perhaps 1/10 while "utility adoption" catches up. It might be then several more years before price climbs back to close to ATH - if ever.
As I'm writing, my question becomes more clear.. "How will we know when the logistic "speculative adoption" curve has run its course and a much bigger - long-term, fundamental - correction has begun.?" Several answers spring to mind, but would appreciate your thoughts.
a) Peak value of Utility Adoption
b) Peak value of Speculative Adoption
Peak value of Speculative Adoption = (Approximately) 10 * Peak value of Utility Adoption
SlipperySlope's S-Curve model (which is a great model and one I like very much), can only be used to model the adoption rate/ relative appreciation of price over time. It does not tell you what the final price will be.
The key insight this model provides is that if you are planning on investing in Bitcoin, you should do so in the next 3 to 6 months. Ideally you should invest all now, however given the fact that we have had a run up and might be consolidating for quite some time. We can dollar cost average or invest during pullbacks, till the middle of 2014.
