Opinion by: Daniele Bernardi, Founder of DIAMAN
Recently, Michael Saylor, CEO of MicroStrategy, made a notable statement about Bitcoin. His company holds a significant amount of Bitcoin in its treasury, second only to BlackRock, the world's leading asset manager, which has launched a Bitcoin exchange-traded fund (ETF).
According to Saylor, Bitcoin (BTC) will grow at an average annual interest rate of 29% over the next 21 years, and by 2045, in his best-case scenario, the price of Bitcoin will reach 13 million USD. This is how Michael Saylor presents his prediction:
"Every Bitcoin you don't buy will cost you 13 million USD, my friend."
That is a strong statement and deserves careful analysis to determine its validity.
Those who follow me are familiar with the 'Acceptance Rate' model. This model relates the price of Bitcoin to the growth rate of 'non-zero' wallets, meaning wallets that contain at least a small fraction of Bitcoin.
I first introduced this model in February 2020 at the Quantitative Workshop Conference hosted by Diaman Partners Ltd. This model predicted the 2021 peak at 63K USD, slightly lower than the all-time high of 67K USD in October 2021.
See also: What is Whale Alert? Learn about Whale Alert
In 2023, I updated the model and published the results on TinTucBitcoin.
The forecast for the current cycle is 130K USD, a price that Bitcoin will soon reach.
With the approval of the Bitcoin ETF in the United States and 11 companies simultaneously promoting this instrument, it is clear that the parameters have changed. I have planned to recalculate the model in the fall of 2024, and now we are at that moment.
With the adjusted model, I am ready to estimate the price of Bitcoin in 2025 before it could fall into the next crypto winter in the fall and winter of 2025.
I compared Saylor's predictions with our model before making a short-term forecast. He predicts an average annual return over the next 21 years, while our model uses a more complex power law. This approach relates the average price per wallet to the number of non-zero wallets in circulation. The multiplication of these variables provides the expected market capitalization of Bitcoin, from which its price can be easily inferred.
Of course, all these predictions are based on the assumption that Bitcoin will continue to exist and its acceptance rate will follow the supply curve, as it has before.
See also: Bitcoin hits a milestone, will bulls push BTC price to 100K USD?
As illustrated in the chart, our calculations indicate that by 2045, the price of Bitcoin could reach 8.3 million USD on the average line. On the higher line, influenced by the stair-step sell-off marking each bullish cycle, it could exceed 21.6 million USD.
It is important to be clearly aware of Bitcoin's potential, as the market is full of individuals satisfied with +60% or +100% returns, only to leave too early and miss out on the extraordinary price growth that follows.
I do not suggest holding Bitcoin indefinitely, as Saylor recommends. However, it should certainly be held for as many years as possible, or at least until it is clear that it will be replaced by something more attractive and functional (currently, there is none).
Now let's turn to the relative peak forecast for 2025 based on the Acceptance Rate model, particularly considering the increase in acceptance driven by Bitcoin ETFs.
The forecast for Bitcoin's peak price in 2025 is 261K USD, nearly double the previous forecast.
Naturally, there is no guarantee that these numbers will materialize, nor should they be considered investment advice. I always recommend conducting thorough research and analysis before making any investment decisions, preferably with an experienced financial advisor who can guide you on proper portfolio allocation. It is essential to understand the dynamics and potential of Bitcoin. Otherwise, it may always seem too expensive to buy.
See also: Ether poised to surpass Bitcoin: Forecast from Bybit
Looking at the chart above, you will notice that even though Bitcoin has reached its highest historical peak, we are still far from the upper boundary projected for the relative peak in 2025.
I will leave you with a profound saying: Each person gets the Bitcoin price they deserve.
Daniele Bernardi is a serial entrepreneur and the founder of Diaman, a group operating in investment management, software development, and crypto activities. He is recognized as an 'Inventor' by the European Patent Office for European and Russian patents in the field of mobile payments.
