Bitcoin power law: fair value today
The power-law model fits Bitcoin's whole price history to a single straight line on a log-log chart. It gives a "fair value" for any date and a floor the price has rarely closed below.
The formula
The version used here and in the Bitcoin Tracker app:
fair value (USD) = 1.0117 × 10-17 × days5.82
where days is the number of days since the genesis block on 3 January 2009. Because the
exponent is fixed, the model's growth rate slows every year: it rose roughly 40% a year in the early 2020s
and keeps falling from there.
How to read it
- Above fair value: the price has run ahead of the long-term trend. Cycle tops have sat several times above the line.
- Near the floor (0.42×): bear-market lows have clustered here. The price has rarely closed below it.
- Between the two: most of Bitcoin's history.
Limits
The power law is a curve fitted to the past, not a law of nature. It says nothing about when the price will move, and a fit can break. Use it as one lens next to others, such as the Mayer Multiple, and never as a sole reason to buy or sell. This page is not financial advice.
Bitcoin Tracker shows the power-law fair value, the Mayer Multiple and the Pi Cycle Top on a chart with today’s price, and can push you an alert when the Mayer Multiple crosses a level you choose.
