- By Pierre-Alexandre
- January 20th, 2019
Trader and analyst fil₿fil₿ shared a very interesting analysis on Twitter on how Bitcoin's price could easily reach the 6 figures.
Find below his Twitterstorm where he uses different data to explain his analysis, such as:
Bitcoin Supply and transaction observation
Internet rate of adoption
Linear / logarithmic Bitcoin transaction
Brave new coin liquid index for Bitcoin
Institute of International Finance
Gemini/RBS World Payments report 2015
Internet systems consortium
Lindy effect /
THREAD> 1/ I decided to spend some time running the numbers using a mix of several known as well as some hypothetical fundamental inputs for Bitcoin to come up with a demo as to how $btc could easily achieve the six figure valuation and beyond. ill explain what's behind it here. pic.twitter.com/GBYbt96sHY— fil₿fil₿ (@filbfilb) January 19, 2019
2/ The fundamental inputs in the model are;— fil₿fil₿ (@filbfilb) January 19, 2019
- Bitcoin Supply:
- Rate of adoption: I have used the rate at which the population adopted the net
- Total global financial transactions: There are c. 1bn transactions / Day
- Total Global Debt: $247tn
3/ Bitcoin Supply [21m] & Transactions observation:— fil₿fil₿ (@filbfilb) January 19, 2019
We know that interest in Bitcoin has been more than sufficient to offset the known inflationary impact & we have in fact seen price appreciation.
New supply & Transactions are positively correlated with price. pic.twitter.com/wLFOii3xVs
4/ Rate of adoption— fil₿fil₿ (@filbfilb) January 19, 2019
I use data from the early days of the internet (% adopted) mixed with known daily transactions to work out where BTC is comparatively:
BTC does c.300k transactions daily
There are ~1bn global transactions
BTC is doing c. 0.03% relatively of total share. pic.twitter.com/NS87vw7m9a
5/ Mixing two data sources, I was able to ascertain that 0.03% of the world was online back in 1991 after around 10 years of groundwork to get there (!!).— fil₿fil₿ (@filbfilb) January 19, 2019
We can use the adoption curve of the net as a proxy to extrapolate BTC's S-Curve if it were to advance in the same way. pic.twitter.com/JzZWvbEqwG
6/ Notice how the internet’s s curve showed adoption happening at varying rates – it was not uniform.— fil₿fil₿ (@filbfilb) January 19, 2019
There are period of growing pains (>>scaling debate)
periods of higher growth / tech advancement (>>lightening network facilitating network effect) pic.twitter.com/AtKXx3jS31
7/ You may suggest that the rate of adoption for Bitcoin is unrealistic but in 1991 the idea of sending letters electronically when there was a fully functioning mail system seemed completely bizarre.— fil₿fil₿ (@filbfilb) January 19, 2019
It was difficult to use and hard to understand why needed for the layman
8/ As we have formed the adoption curve, we can share the amount of world debt represented by the existing monetary system.. i.e.— fil₿fil₿ (@filbfilb) January 19, 2019
100% (1bn) transaction adoption = $247tn
1% transaction adoption = $2.47tn
0.03% transaction adoption (today) = $74bn
9/ We also know the number of Bitcoins today and going forwards. Nb. I adjust bitcoins for lost bitcoins by 4million by year— fil₿fil₿ (@filbfilb) January 19, 2019
We can mix the extrapolated adoption rate & transactions derived + the value they represent together over time with the known BTC supply.
10/ This model worked backwards with no extrapolation of price history suggests the network is worth c. $74bn today or / a net (17.4-4m) 12.4m coins implies BTC would have a value of c. $5-6k per unit on this basis.— fil₿fil₿ (@filbfilb) January 19, 2019
11/ On the chart the solid purple line is fact and the dotted is the model.— fil₿fil₿ (@filbfilb) January 19, 2019
I have included upper and lower bands throughout represented of highs and lows in Bull / Bear markets and what is possible if hype / bear cycles are encountered as seen previously. pic.twitter.com/hJoJ5auMjp
12/ I realize that there are many areas you could drive a bus through in this model, but the purpose of this was to make you think about price differently.— fil₿fil₿ (@filbfilb) January 19, 2019
We need to be working backwards from the end game to consider future value, rather than extrapolating the current trend pic.twitter.com/2tOIE5gKq2
13/ So yeah... "this time it will be different"— fil₿fil₿ (@filbfilb) January 19, 2019
If/ When the herd come... hold on to your pants. pic.twitter.com/gHS1QFIeQ7
Sources / Credit;— fil₿fil₿ (@filbfilb) January 19, 2019
- Institute of International Finance
- Gemini/RBS World Payments report 2015
- Internet systems consortium
- Lindy effect / @MustStopMurad
PS sorry for the basic math error in the thread 17.4-4 is indeed 13.4 not 12.4 :)
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