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Tuesday, October 16, 2018

Smoking the $-Curve

We could assume that Bitcoin will rise relative to the US dollar by 6% per month, or 100% every year, until it shoots free from the S-Curve. Thus, its value should double every year until the mid 20s, and beyond.

I believe that Bitcoin is in the Era of Ferment stage of its life cycle, and has yet to enter the Early Adopters phase, and cross the chasm. Nonetheless, it seems to be growing in value 100% per year. I am not the first to draw this conclusion. Visionary trader Venzen Khaosan made this very same discovery way back in 2014, while describing a chart: "This up-sloping support line can be interpreted as Bitcoin’s minimum growth trajectory. It is currently at $120 which means it has doubled since a year ago, and this doubling continues at an annual pace according to the support floor’s present inclination..."

Pimping the $-Curve (Japan, 2006)

To complicate things, Bitcoin's value may surge as high as 1300% above the support floor, at any time. The upper range of possible prices from 2014 to 2020 (projected) can be shown here: US$1300 (2014), $2600 (2015), $5200 (2016), $10,400 (2017), $20,000 (2018), $42,250 (2019), $84,500 (2020). The lower possible range of prices over the same period is: $100 (2014), $200 (2015), $400 (2016), $800 (2017), $1600 (2018), $3200 (2019), $6400 (2020). 

While price explosions might be exhilarating, they don't occur so often. Most of the time, price just bounces along some distance above the floor. In my analysis, bear markets last three times longer than bull markets. Absolute lows are hit once every 18 months or so. The complete cycle, from peak to following peak, appears to be getting longer -- the most recent one stretched for four years... (To read my full analysis of how Bitcoin will mature in the years ahead, click here.)
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