Every bitcoin price model eventually gets humbled by the market.
Stock-to-Flow looked compelling in 2019 and 2020. I wasn't a true believer, but the logic pushed me to stack more sats than I otherwise would have, and those sats are worth a lot more today even though the model eventually broke.
That's the useful tension. A model can be wrong about the future and still change your behavior in a way that pays off.
The power law is the current version of that debate. It fits bitcoin's history better than a flat CAGR because it assumes growth decelerates as the network matures, which is more realistic than pretending bitcoin compounds at 25% forever. But it still isn't a prophecy, and anyone treating it like one is repeating the same category error S2F believers made.
For FIRE planning, use it for calibration. Run your numbers under a flat rate, run them under a decelerating curve, and look at the range. Directionally correct assumptions beat fake precision because they help you make better decisions today.
Read the full piece on using bitcoin price models without worshiping them: https://firebtc.io/p/all-your-models-will-be-destroyed
Stock-to-Flow looked compelling in 2019 and 2020. I wasn't a true believer, but the logic pushed me to stack more sats than I otherwise would have, and those sats are worth a lot more today even though the model eventually broke.
That's the useful tension. A model can be wrong about the future and still change your behavior in a way that pays off.
The power law is the current version of that debate. It fits bitcoin's history better than a flat CAGR because it assumes growth decelerates as the network matures, which is more realistic than pretending bitcoin compounds at 25% forever. But it still isn't a prophecy, and anyone treating it like one is repeating the same category error S2F believers made.
For FIRE planning, use it for calibration. Run your numbers under a flat rate, run them under a decelerating curve, and look at the range. Directionally correct assumptions beat fake precision because they help you make better decisions today.
Read the full piece on using bitcoin price models without worshiping them: https://firebtc.io/p/all-your-models-will-be-destroyed
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