CoinDesk Podcast Network BITCOIN SEASON 2: All Your Bitcoin Models Are Broken (But Really)
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Jun 14, 2025 Explore the flaws in well-known Bitcoin price models like stock-to-flow and rainbow charts. The hosts humorously dissect why these models miss the mark, likening predictions to monkeys writing Shakespeare. They introduce a fresh theory on institutional price corridors while evaluating the impact of ETF adoption on Metcalfe's law. As they ponder Bitcoin's potential rise to a $100 billion market cap, they also grapple with the ethical implications of wealth in an evolving financial landscape.
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Stock-to-Flow Model Flaws
- The Stock-to-Flow model was once the prevailing Bitcoin price model but has been thoroughly broken.
- It fails to account for holders selling, assuming demand and scarcity always increase price.
Resilience of the Rainbow Chart
- The Rainbow Chart, although simple and initially humorous, remains undefeated in broadly capturing Bitcoin price ranges.
- Its wide ranges mean it is rarely invalidated, serving as a loose but useful heuristic.
Power Law Price Predictions
- The Power Law model forecasts Bitcoin prices using nonlinear but predictable growth patterns.
- It predicts $100K by 2028 and $1 million by 2037, but the model awaits long-term validation.