Bitcoin has touched $10000, the hype and FOMO around Halving have kicked in possibly. While no one can truly predict exactly what the price of BTC will be at halving and days, weeks, months, years after that. But that hasn’t stopped Crypto Twitter from speculating.
CT is full of folks sharing the previous data on prices during, before and after halving, prompting us to consider that history may repeat itself, or to pleasure the sceptic in me, third time might not be the charm.
Our very own CryptoKanoon put out a brilliant tweet the other day with historical data.
Many people replied with their predictions. But Pareen came with a different theory.
“What if we view it like a product”, by product, he means Facebook, Instagram, Twitter. Product growths are non-linear.
Bitcoin as a Product
To project its growth linearly would be a mistake. If we consider Bitcoin to be a product, we have to account for a reduction in growth rate. This means we have to reduce the growth rate in the same ratio as the last two halvings.
The BTC price that we get for One year after halving, based on the historic price and considering today’s price as the price on Halving day.
|Time||Subject||Year 1 (Before halving)||Year 2 (Halving)||Year 3 (After Halving)|
|Reduction in Growth from Halving 1||-59.6%||-95.4%|
|Halving 3||Predicted Price|
Y2 Price + H2Y3 Growth - H2Y3 Reduction
(Plain Prediction based on today's price)
(Halving day price +384%(Y2 growth) - 95.4%(H2 Reduction)
As we can see, the growth rate itself reduces as any product matures. Facebook did not grow at the same rate in its tenth year as it grew in its first few years. This gives a pretty disappointing picture.
BTC Price could be $2000 within a year from Halving.
These prices are just based on one factor, that is the reduction in supply.
The real Question to ask here is, “Is Bitcoin a Product?”
Bitcoin as a protocol
There is another way to look at this. These calculations might be a futile exercise entirely because Bitcoin is not a product, it is a protocol. Like TCP/IP, Bitcoin can be viewed as a protocol to transfer value.
If we look at it this way, there is no way to correlate Bitcoin’s adoption or growth to its price.
While everyone makes predictions, most exercises yield results based on what you feed in. One thing no one can deny is that Bitcoin is an unprecedented innovation. There are hardly any parallels.
But it is always fun to make predictions, after all what are we without a dopamine hit or being right, or nearly being right.