According to Cointelegraph, Metcalfe’s law can explain the formation of Bitcoin prices to a certain extent. This law is closely related to Bitcoin because it means that the value and utility of the Bitcoin network grows exponentially as the number of users and participants (holders, investors and traders) increases.
The rise in Bitcoin prices in 2017 is one of the ideal examples of Metcalfe's Law in action. As public and media interest in cryptocurrencies increased, more people entered the market, which helped drive an increase in the number of people using Bitcoin. Due to this increased adoption, demand for Bitcoin rose, and prices reached all-time highs.
Although Metcalfe's law applies, it does not fully describe the complex dynamics of Bitcoin prices. Many factors, such as market sentiment, government changes, macroeconomic trends, and technological improvements, can affect the cryptocurrency market. In addition, due to Bitcoin's volatility, speculation can have a large impact on short-term price movements.
