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Fitting a Logistic Adoption Curve (S - Curve) to Bitcoin Price History
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This spreadsheet is my attempt to fit a logistic function to the bitcoin price history and thus predict its future. We know that exponential growth cannot continue forever. So what are the circumstances that end that sort of growth for bitcoin prices?
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See in particular the combined chart and results pages.
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See Wikipedia . . .
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http://en.wikipedia.org/wiki/Logistic_function
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Because the initial phase of the logistic curve is exponential, I found that a wide variety of maximum bitcoin prices could reasonably match the chosen price history endpoints.
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What is interesting is that the resulting family of curves revealed that the very rapid growth of bitcoin prices will not last beyond a few more years.
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I configured the calculations to accept a guess as to what the maximum bitcoin price in $US will be. I tried four values from $40,000 to $5,000,000. For each maximum bitcoin price, I manually adjusted the starting X value and adoption period such that the logistic curve passed through the July 7 2010 price and also passed through the November 11, 2013 price. The resulting adoption periods range from 10.3 years for the $40000 max price to 13.85 years for the $5000000 max price. The logistic function becomes linear at the adoption halfway point and then becomes exponentially decreasing. In the case of a $1,000,000 bitcoin price, the exponential growth stops in 2017.
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Note that the logistic function is fit to the price curve and models the behavior of speculators, not the underlying bitcoin
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economy, which I suppose may take 20-30 years to become fully adopted, e.g. replace precious metals and fiat currencies. economy, which I suppose may take 20-30 years to become fully adopted, e.g. replace precious metals and fiat currencies. Likewise, even after full adoption, bitcoin prices will continue to grow as the underlying bitcoin economy grows.
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There are four calcualation pages plus a combined calculation page, as well as four individual charts plus a combined chart. Price targets for all scenarios are summarized in the final results page.
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I plan to periodically update the price history, but leave the curve-fitting endpoint at November 11, 2013 until this current bubble is resolved.
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You can make a copy of this worksheet and adjust the three parameters as you like: Maximum price, starting X, and adoption period.
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