Using a logistic approach to model Bitcoin's price
Author: @gbianchi 1GbianchiJ6EeBU8ua77719Ur7qwLZVk3x
Revision 0.5 04/11/2024
Intro
A bunch of Bitcoin price models have been floating around for a while, and recently two of them have really caught attention: PlanB's S2F model and Santostasi's PowerLaw model.
Without getting into the nitty-gritty of how these models work, there are two main issues that throw their foundations into doubt:
1) They base everything on fiat currency, usually looking at BTC price in USD.
2) The patterns tend to just go up forever, so it's a given that they'll eventually break down.
I'm gonna try to lay out a model that skips these fundamental issues.
Picking a solid reference point: gold
When creating a Bitcoin pricing model that can actually hold up over time, we need a reference point that’s pretty stable and consistent.
Using a fiat currency as a reference means the model is at risk of changes in that currency over time. These changes can come from inflation, political issues, or economic troubles in the country issuing that fiat.
Take the U.S. dollar, for example. Even though it's often seen as a go-to currency for international trade, all these problems become super clear. We deal with devaluation from inflation, political volatility, and major issues with the debt-to-GDP ratio. So, on top of the already tricky job of figuring out a Bitcoin price model, we're adding a whole lot more complexity.
The BTC/GOLD Oz t price, therefore with a non-inflationary unit of measurement, has not yet reached 2021-11-09 ATH
This demonstrates the importance of a non-inflationary unit of measurement (gold).
Federal reserve is the largest holder of gold in the world, arguably there isnt enough demand for FED to sell just like that. It would have to be part of a twenty year plan to revolve assets like China has aquired gold in that time line in the past 20 years and also becomes the worlds largest producer and buyer of gold. China started from zero foreign reserves in gold and FED would be starting as the opposite dilemma.
I really doubt on this much clarity in the next 4 years and the FED dumping its gold, they could start to sell but I would not guess this occurs especially. There is far too much debt and in theory the gold is the only thing that justifies alot of the Dollar issuance, the continuance of the Dollar as the global reserve asset. I cant see Powell wanting to pick this hot potato just before he retires.
You seem to be engaging in a pretty BIG ASS presumption in regards to the Fed actually having the gold that they claim to have, which is a pretty BIG presumption given that it seems that it has not been audited since about the 1950s, if I recall correctly from information that I had heard about. Maybe it was audited more recently than that, but even right before bitcoin came onto the scene (or maybe it was around the same time), wasn't there some big hoopla about trying to audit the fed, and maybe that related to auditing the gold reserves, too. I believe Ron Paul talked quite a bit about that.
With any nation state, isn't there a bit of obscurity regarding if they actually hold the gold reserves they claim to hold, and sometimes we find out that some of their own reserves end up not being real, such as having tungsten in the middle.. so one of the more assured ways to confirm reserve levels is to actually melt the gold down and then to reconstitute it... which likely would be somewhat costly to do.
Ok. so you are suggesting that even though the dollar is not backed by gold reserves, yet at the same time the dollar gets some of its presumptive value based on speculation that the USA gold reserves is really at or near the levels that they claim to be? I am not saying that is a wrong presumption, yet I was not sure how much the actual existence of the gold reserves gives more or less credibility to the value of the dollar. You are probably correct that there is some faith that the USA does actually have some elements of value backing up the dollar besides it completely just being on faith of good credit. I surely don't claim to know the answers to my own questions since there is a bit of amorphousness regarding exactly what backs up the dollar currently, and surely bitcoin does have quite of a bit of neutral legitimacy.. at least so far in bitcoin's life bitcoin seems to be much easier to verify in an open and transparent way... especially as compared with gold or other various kinds of amorphous ways that the dollar might currently be backed up.
My scenario of BTC at 2,200 BTC/oz was calculated on the back of a final BTC market capitalisation being at 6 times the Gold Market Capitalization.
Well, great minds think alike!
Micheal Saylor is calling for BTC to be 6.22x Gold in 2045.