Predicting 2022–2032 price action with Bitcoin Waves model

Introduction

Published in

Coinmonks

3 min readJan 3, 2022

It’s hard and surreal to imagine that all the work of our ancestors, our parents, our grandparents, was confiscated through inflation and loss of property rights. Bitcoin emerges to fix this issue by decentralizing decisions and controlling inflation.

Figure 1 illustrates the halving effect in the Bitcoin annual inflation rate [1]. As can be observed, Bitcoin inflation dropped from 3.9% in 2020 to 1.8% in 2021.

Figure 1. Bitcoin annual inflation rate (From Coinmetrics).

There are approximately 815 days to the next halving[2] when inflation will drop to 0.8% in 2024 and Bitcoin will have one of the lowest inflation rates of any economy in the world[3]. Our generation has a great opportunity that was stolen from our ascendents.

In the present study, therefore, the Bitcoin Waves model was applied and optimized for the prediction of Bitcoin prices between 2022 and 2032. This model predicts the next waves by approximating the future waves as linear combinations of prior waves[4,5].

The worst scenario

The linear combination of 1st, 2nd, and 3rd waves produced the model presented in Figure 2 for the present scenario (2022). On the other hand, this wave has faced the covid-19 pandemic that has affected the entire world economy, therefore affecting all prediction models. Even though, the model showed good performance characteristics (cosine similarity of 87.6%).

Figure 2. Bitcoin Waves Model (2022–2024).

In the worst scenario, in case of pandemic persists, the predicted min price date for bitcoin after Jan 2022 will be in June 2022, more or less 778 days after the halving. However, the price will rebound in Dec 2022, reaching 62k.

The best scenario

After 2024 halving, the Bitcoin annual inflation rate will drop to 0.8% and the Bitcoin Waves model designs sunny days for bitcoiners. The price could reach 328k in Jan 2025 (Figure 3).

Figure 3. Bitcoin Waves Model (2025–2028).

Finally, long-term holders will find a price of 847k in 2028 (Figure 4) and 1.4M in 2032 (Figure 5).

Figure 4. Bitcoin Waves Model (2028–2031).

Conclusion

The method applied in this report is versatile, fast, and simple. Bitcoin Waves model provided an interesting adjust, as well as allowed us to visualize a possible future for bitcoin using linear combinations. What if the model is right?

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Acknowledgments

The author is grateful to Satoshi Nakamoto, Hal Finney, Nick Szabo, Changpeng Zhao, Sabrina Moraes, and André Fauth.

References

1. Network Chart | Coin Metrics

2. https://www.buybitcoinworldwide.com/pt/bitcoin-clock/

3. https://tradingeconomics.com/country-list/inflation-rate

4. Bitcoin Waves: A linear combination for price modeling | by Edgar Moraes | Coinmonks | Mar, 2021 | Medium

5. https://medium.com/coinmonks/bitcoin-what-was-what-is-and-what-probably-will-be-8aba4d01eb7b