Giovanni Santostasi, a former physics professor, has brought fresh perspectives to his “power law” model for predicting the price of Bitcoin (BTC), which suggests that the price of an individual BTC could reach $10 million by 2045.
A power law is a mathematical relationship where one value is directly proportional to a fixed power of another value. This law has been observed in various natural phenomena, ranging 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 attention in January of this year when finance YouTuber Andrei Jeikh mentioned it in a video to his 2.3 million subscribers.
According to Santostasi, the model predicts that Bitcoin could reach a peak of $210,000 in January 2026 before experiencing a subsequent drop to as low as $60,000.
During a discussion with mathematician and Bitcoin investor Fred Krueger on March 2, Santostasi explained that the power law model offers a more comprehensible and predictable representation of Bitcoin’s price movements over long periods. In contrast, the short-term Bitcoin price charts commonly used in mainstream media tend to provide a messy and inaccurate view of Bitcoin’s price action.
“When you take the logarithm of the y-axis, you can see some regularity there. It doesn’t look messy; it looks like a very nice pattern,” Santostasi explained.
Santostasi emphasized that the power law model, unlike the often criticized stock-to-flow model, is logarithmic rather than exponential. This means that Bitcoin’s price does not have to increase constantly over time, and significant price fluctuations, such as those observed between 2020 and 2023, can still be accounted for under this model.
In a subsequent post on March 3, Krueger further elaborated on the mathematical modeling of the power law when applied to Bitcoin. According to his analysis, Bitcoin could reach a price of $100,000 within the next two years.
Krueger also projected that if Bitcoin adheres to the power law model, its market capitalization would surpass that of gold by 2033, with each Bitcoin token being 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 fails to consider random events that could have a profound impact on prices.