Manage Future Bitcoin Price Expectations & Volatility
Draft
Since Bitcoin has a strictly limited supply, it's natural that, over time, prices denominated in Bitcoin tend to decline. Its deflationary nature means that any amount you spend today will likely gain purchasing power in the future—had you not spent it, it would have been worth more down the line.
With that in mind, the specific amount of Bitcoin you hold at any given moment is less important than the broader trend of your purchasing power. What truly matters is whether that purchasing power is increasing over time, particularly relative to when you first adopted a full Bitcoin standard.
It’s also important to recognize that spending Bitcoin in real terms is inevitable. Any time you make a purchase—whether using fiat or Bitcoin—you are drawing from your total purchasing power. That amount can always be expressed in Bitcoin terms using the exchange rate at the time of the transaction. So, if you spend $100 in fiat, you have effectively spent $100 worth of Bitcoin at that point in time.
Lastly, it’s not critical whether your larger purchases occurred before or after a market peak. What matters is that those expenditures were within your financial means, that your overall net income remained positive, and that you maintained healthy inflows through regular reconciliation and balance adjustments.
building conviction - takes time & education
fear & greed
Power Law
historical CAGR in the past 5 years - around 60%
next 7-8 years, around 30% per year
As of January 16, 2025, the Bitcoin price is $98,693, and the power law trend stands at $86,162.
One year from today, on January 16, 2026, the power law is projected to reach $121,565, which represents a 41% increase.
Two years from now, on January 16, 2027, the projection is $168,177, reflecting a 38.26% increase from January 16, 2026.
The following year, on January 16, 2028, the expected value is $228,621, indicating a 35.74% increase from the previous year.
By January 16, 2029, the projection rises to $306,176, showing a growth of 33.73% from January 16, 2028.
Finally, on January 16, 2030, the projection is $403,932, representing a 32% increase from January 16, 2029.
Growth Rates:
January 16, 2025 to January 16, 2026: 41%
January 16, 2026 to January 16, 2027: 38.26%
January 16, 2027 to January 16, 2028: 35.74%
January 16, 2028 to January 16, 2029: 33.73%
January 16, 2029 to January 16, 2030: 32%
Notes
purpose of this guide: learn to react and take advantage to Bitcoin volatility, instead of trying to hedge against it
unit cost averaging vs all in
can we predict future price? just like with weather in the future, we can't predict it 100% exactly, but we can have reasonable expectations with varying degrees of confidence
cyclicality
probability ranges
nocoiners look at bitcoin price chart in linear scale, both for time and price
most bitcoiners realize it's better to look at bitcoin price in log scale
when you look at the chart from log scale for price and in log scale for time, you notice a pattern: bitcoin grows according to power law
patterns and cycles: bitcoin monetization periodicity and predictability
bitcoin price behaves in a regular fashion, when you look at log-log chart
exponential up for 1 year: bull market
exponential down for 1 year: bear market
2 year along the power law
With Bitcoin, we observe price dynamics that follow a power law, featuring exponential rises and falls occurring periodically every four years.
market sentiment estimation: fear & greed.
as long as we can see people getting into Bitcoin while carrying any kind of debt on their balance sheets, expect relatively high volatility and cyclicality to continue
what should you do when you feel bearish?
what should you do when you feel bullish?
focus on price & time
power law theory - explanation
price
addresses
hashrate
always go back to your budget & use power law theory just to get a sense where we are
don't worry too much about timing the market, focus on spending time in the market
zoom out, start looking at time in log scale
understand Bitcoin monetization will take a century
if you use Bitcoin as your primary money, all of this will be very easy
think in terms of quantity and quality of your time - bitcoin fluctuations should mean increasing or decreasing quantity and quality of your time: "I have 6 months of my current quality of time saved. If I double my quality of time by spending double of what I spend now, I'll have 3 months of my time saved. If bitcoin doubles in price, I'll have 12 months of my current quality of time saved. if bitcoin price gets cut in half, I'll have 3 months of my time saved.
working means trading your time for money, so you can trade money for higher quantity & quality of time later
idea of your bank of time that you are trading for more & higher quality of time: 40hours in a week, 160 hours in a month, 1700-1900 hours in a year, 17000 - 19000 hours in a decade
60000 working hours - takumi concept (Japan)
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