What Bitcoin Did
Is The Bitcoin Power Law Broken? | Matthew Mezinskis
- Power law vs. exponential growth: Bitcoin follows a power law (declining growth rate, currently ~40% annually) rather than exponential growth. This is distinct from traditional financial assets and the stock market, which exhibit exponential trends driven by fixed interest rates.
- Four-year cycle remains intact: Despite price dipping below the power law trend, historical data shows cycles have repeated roughly every four years. The current downturn (~53% decline) is shallower than previous bear markets (77–85%), and only nine months in.
- 2029 price projections: If the power law and four-year cycle hold, November 2029 could see Bitcoin reach a median of ~$365,000, with Q90 around $500,000 and theoretical upside to $1 million (Q100).
- Coming financial system collision: By the 2030s–2040s, Bitcoin's slowing power-law growth will converge with the stock market's accelerating exponential growth. This collision may force a choice: Bitcoin either gets co-opted into an exponential asset (with trade-offs like reduced self-custody optionality) or fundamentally reshapes finance toward power-based credit models.
- Mining as structural shock: Every four-year halving, while nominally reducing subsidy, will remain economically significant—potentially worth hundreds of billions by 2045. Dismissing mining's importance ignores monetary history and Satoshi's deliberate design.
- Statistical value now: Relative to the power law, Bitcoin is currently at deep-value territory—worse sentiment than 2022, but statistically cheaper than at any prior bear-market bottom.