Timothy Peterson, a prominent crypto analyst and respected network economist, issued a Friday forecast via X that predicted a rise in Bitcoin prices in the next 8 months. “There’s a 90% chance Bitcoin will reach a new ATH before March 2025,” Peterson proclaimed.
Peterson is known for many of his works, including “Metcalfe’s Law as a Model for Bitcoin’s Value,” The research framework outlined in the paper entitled “Lowest Price Forward: Why Bitcoin’s Price is Never Looking Back.” This article, originally published in 2019. It was then updated to introduce a new approach for understanding Bitcoin’s price trajectory. The focus is on the historical low prices of Bitcoin, also known as the “Never Look Back Price” (NLB). This NLB is the final time Bitcoin has been traded at this price.
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Peterson’s method involves plotting the NLB points onto a lognormalized scale, adjusted with what he refers to as a “square root time” scale. This metric is a unique way to gain a greater understanding of Bitcoin’s long-term patterns, and compare them with other diffusion processes in the tech world.
Bitcoin Adoption Is Key
Metcalfe’s Law forms the core of Peterson’s analyses. “the value of the network is proportional to the square of the number of its users.” Peterson asserts that by applying the principle to Bitcoin’s intrinsic value, it is likely to grow exponentially as its user base grows. This paper presents the details of using a “square root time” Model to align time-value money with non-linear rates of growth typical of network economies, making a convincing case for Bitcoin future valuation trajectories.
Peterson’s method notably combines elements of conservatism financial Analysis by highlighting the lowest historic prices of Bitcoin. “By focusing on the lowest price, the analysis inherently adopts a conservative stance, underestimating rather than overestimating value,” Peterson Notes, that helps in “minimizing the risk of overvaluation and ensures that predictions do not overly rely on optimistic scenarios which might not materialize.”
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Peterson’s paper also discusses potential market manipulations and anomalies that can affect price perceptions. Focusing on the NLB filters such distortions out, providing a purer view of Bitcoin’s price appreciation that is not affected by short-term pressures from speculators or external shocks. COVID-induced market anomalies In 2021, the year of 2020 will be.
Prediction of the future new all-time high Peterson’s statement that he believes the Bitcoin network is going to continue growing before March 2025 reflects an overall sentiment of optimism. The forecast, which is based on quantifiable historical trends and adoption curves that continue to increase and further entrench Bitcoin’s value as network effects are a factor in the future growth of the Bitcoin network before March 2025, does not reflect a speculative view but rather reflects broader sentiments about the sustained growth of the Bitcoin Network.
Peterson concludes “As long as adoption continues, Bitcoin’s value — represented by its NLB price — will go up. If adoption is hindered, then the price will stagnate or drop.”
BTC was trading at $58,192 as of the time this article went to press.
Featured image created with DALL·E, chart from TradingView.com
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Source: www.newsbtc.com