The one that says we're going to $60k over four years is too conservative compared to the one that thinks we'll be over $10k in under two years. I can't/won't explain why, but suffice to say that $10k in under two years is just the start of it.


I'm just not divulging what happens after 2017, because I'm in this to make money and I need some of the people who could potentially read this to despair and sell into potential buy walls.

The $60k at 2020/2021 model also expects the price to bump over $10k briefly in early 2019, I just don't show that part. Suffice to say, the newer model is more accurate, don't focus too much on the old one.

There isn't anything "stopping" an increase, it's more of an estimation of human nature. What do you think is going to happen when the price goes from like just under $1k to over $10k in under a year? Of course people are going to sell. All my models attempt to do is use previous hype cycles to build expectations of the next price cycles, they are estimations of what could happen, not necessarily what is going to happen. I have backtested or verified them with respect to previous hype cycles, however.

Also, I am focusing on "bear side" potential, but I've had a few people who have PM'd me tell me I should focus on using the bull side data (with the assumption that bear side is too conservative and might be inaccurate because of this). I have not yet thought about averaging the two, but I'm not sure how you "average" together dates. It doesn't seem possible. Of course, I thought modelling trends in volume wasn't possible either and that proved to be wrong.


Well, the exponential price swings are more due to the hype cycle and human nature than anything else. The problem is that -- with Bitcoin -- the traditional hype cycle is also ingrained into the pricing structure for the underlying commodity. The more adoption the more valuable the underlying asset or unit is. In this case this means that Bitcoin will almost always hit higher "lows" after bubbles pop, but it also means that increases will occasionally be very short and very exponential.

I know there are number of people who say "with higher adoption we'll have less volatility", but that's an absurd comment to make at this stage of the game and perhaps in general. When talking about what Fakhoury mentions here, the "behavior" of an asset like Bitcoin, we should probably do a brief look into historical pricing. Has anyone ever heard of Jay Gould? Well after the gold rush and when the civil war was coming to an end, America had been trading for a few years in greenbacks but prominent people were calling for a return to a gold standard. Jay Gould had an idea to corner the gold market and devalue the greenback by having President Grant close the "gold window" similar to how Nixon would end up doing it nearly a century later. They convinced President Grant through somewhat-deceptive means, but perhaps with a valid argument. The notion was that by making gold scarce and highly valuable, the value of the greenbacks held by the public would decline and therefore goods would become cheaper to foreign countries. In practice, the price of gold went from low amounts to $145 and nearly $160 after the conversion of greenbacks to gold had been closed.

Over a century later, after Nixon closed the gold window, inflation quickly began to get out of hand. While Volker at the Federal Reserve had increased lending rates, the Hunt brothers and some wealthy Arabs used a similar tactic and their own wealth to corner the market on silver. This brought the price to over $55/ounce, something that wasn't met again till 2012. The "solution" that was used to stop them by COMEX was to argue with regulators that they needed to close margin accounts. This was used to force the price downward and the Hunt brothers were victims of this scheme despite the fact that it was not their fault the exchanges couldn't deliver on the assets. Ultimately, they were the recipients of the first big Fed "bailouts". I would speculate that while the Hunt brothers settled with those they owed, the US gov't may have worked on a deal with the Arab shieks that led to the start of the petrodollar.

The point of both of these examples is to show that silver and gold had been trading for centuries and they were still volatile. The idea that more adoption makes Bitcoin less volatile is errant, IMHO.

Right now we're in a similar situation as these two historic examples. With Saudi Arabia being seen less as an ally and more as an enemy (the death of the petrodollar) and Federal Reserve interest rates at all time lows, all that remains is for some enterprising billionaire to step in and first borrow as much as they possibly can to invest in Bitcoin and try to corner the market, using their own personal wealth and perhaps that of others as insurance against the borrowed money in order to litigate if they are unable to receive delivery of their coin. The market is ripe for this sort of turmoil, and someone could stand to make a huge amount of money in the process, as the media tends already to go nuts at the first sign of 10% or more increases in the price of the nascent crypto-currency markets.

So yes, I think exponential prices are possible, but I don't think this is some inherent "behavior" of Bitcoin, but rather as a result of speculators that are aware of the scarcity of coin, the hype cycle, and the nature of man. We've all heard the quote that necessity is the mother of invention. That may have been what led to Bitcoin to begin with, we needed it to combat the rampant inflation over the entire world. I'd similarly argue that scarcity is the mother of opportunity, and if it is possible to destroy the Federal Reserve banking system by borrowing against it to pump crypto currencies that will inevitably replace it, then some enterprising soul is eventually going to do exactly that.


Yes, bouncing around between exchanges and using early market pricing isn't ideal, but like you said, ultimately you just have to pull the trigger and start somewhere. I wanted to focus on the bear-side, and right from the git-go after Mt Gox came out at ~$0.10 the price immediately started falling, so I had to start there. What is sad is that the sample size was maybe two dozen total traders (if even that!) so it's probably not going to be great.

I like your 900-day cycle though, and I'll try to take this into consideration as time goes on. Even with us speculating here, there might be some risk, as many traders will take some advice as gospel and others will try to make money off of the people who try to follow it. I originally thought (at least in 2014) that the price of coin was going to fall to ~$60/coin, so I missed the bottom of $160 this time around. I did make some reasonably significant purchases in the $240 range, but it wasn't anything like I did back in November 2011 when I was able to spot the $2 bottom. Back then, though, we had these huge buy walls we could take advantage of, and those seem to have all but disappeared in the last 2-3 years.

Anyway, like you said, it might be fun to speculate, but none of this should be taken as actual trading advice. No one can predict the future. I just wanted to get some predictions out there for fun and this thread seemed like a good one to put them in. Maybe I'll be bumping it here in a year to do a "see? I told you so!" in jest. Good luck in your trading everyone!