Opinion of: Daniele Bernardi, Founder of DIAMAN
Recently, Michael Saylor, CEO of MicroStrategy, made a notable statement about Bit. The company he leads holds a significant amount of Bit in its treasury, second only to BlackRock, the world's leading asset manager, which has launched a Bit Exchange Traded Fund (ETF).
According to Saylor, Bit (BTC) will grow at an average annual rate of 29% over the next 21 years, and by 2045, in his best-case scenario, the price of Bit will reach $13 million. This is how Michael Saylor presented his forecast:
"Every Bit you don't buy will cost you $13 million, my friend."
This is a strong statement and deserves careful analysis to determine its validity.
Those who follow me are familiar with the "Adoption Ratio" model. This model relates the price of Bit to the growth rate of "non-zero" wallets, i.e., those wallets that hold at least a small fraction of Bit.
I first introduced this model in February 2020 at the Quantitative Workshop Conference, organized by Diaman Partners Ltd. The model predicted the 2021 peak at $63K, slightly lower than the all-time high of $67K in October 2021.
In 2023, I updated the model and published the results on TinTucBitcoin.
The forecast for the current cycle is $130K, a price level that Bit will soon reach.
With the approval of the Bit ETF in the United States and 11 companies simultaneously promoting this tool, it is clear that the parameters have changed. I planned to recalculate the model in the fall of 2024, and now we are at that time.
With the model recalibrated, I am ready to estimate the price of Bit in 2025 before the next possible crypto winter in the fall and winter of 2025.
I have compared Saylor's forecast with our model before making the short-term forecast. He predicts an average annual return over the next 21 years, while our model uses a more complex power law. This approach relates the average price per wallet to the number of non-zero wallets in circulation. The multiplication of these variables provides the expected market capitalization of Bit, from which its price can be easily derived.
Bit price and its power law describe the trend over time.
Of course, all these forecasts are based on the assumption that Bit will continue to exist and its adoption ratio will follow a power curve, as it has done so far.
As illustrated in the chart, our calculations indicate that by 2045, the price of Bit could reach $8.3 million on the medium trend line. On the higher trend line, impacted by the stair-step explosions that mark each price cycle, it could exceed $21.6 million.
It is important to be fully aware of Bit's potential, as the market is full of individuals satisfied with a +60% or +100% return, only to leave too early and miss the extraordinary price increases that follow.
I do not recommend holding Bit indefinitely, as Saylor suggests. However, it should certainly be held for many years, or at least until it is clear that it will be replaced by something more attractive and functional (which is not the case at present).
Now let's move on to the forecast for the relative peak in 2025 based on the Adoption Ratio model, especially considering the increased adoption driven by Bit ETFs.
The forecast for the peak price of Bit in 2025 is $261K, nearly double the previous forecast.
Current drivers of Bit price
Of course, there is no guarantee that these figures will materialize, nor should they be considered investment advice. I always recommend thorough research and analysis before making any investment decisions, ideally with the guidance of an experienced financial advisor who can guide you on appropriate portfolio allocation. The key is to understand the drivers and potential of Bit. If not, it may always appear too expensive to buy.
Looking at the chart above, you will see that even though Bit has reached its all-time high, we are still far from the upper boundary projected for the relative peak in 2025.
I will leave you with a profound statement: Everyone gets the Bit price they deserve.
Daniele Bernardi is a serial entrepreneur and the founder of Diaman, a group operating in the investment management, software development, and crypto sectors. He is recognized as an "Inventor" by the European Patent Office for European and Russian patents in the field of mobile payments.
