Bitcoin Power-Law Model Signals Strong Long-Term Returns

📌 Bitcoin’s long-term outlook continues to impress analysts, and a new simulation based on the Bitcoin power-law trendline now suggests that even $100K entry points may deliver strong returns for patient investors.

📊 Bitcoin Power-Law Model Shows Long-Term Strength

📈 A new 10-year analysis grounded in the Bitcoin power-law trend argues that timing concerns may be overstated for long-term BTC holders. Bitcoin researcher Sminston With tested how a hypothetical investor would perform if they deployed $100,000 at three possible entry prices: the current mid-cycle value near $94,000, 20% below it, or 20% above it. The study uses the Bitcoin trajectory to simulate decade-long outcomes with annual withdrawals, creating a stress-tested and realistic scenario for long-term investors.

📉 The simulation tied each path to the median projection of the model, which historically estimates long-range BTC valuations with surprising accuracy. The hypothetical investor also withdrew 10% of their Bitcoin every year, mimicking a real-world scenario where savings or spending gradually reduce the investment base. Even with these withdrawals, the projection showed strongly positive decade-long outcomes.

💹 According to the analysis, the “unluckiest” case—buying 20% above $94K and selling 20% below the projected 2035 median—still delivered a 300% increase on remaining Bitcoin holdings after a decade. This resilience, the researcher argued, reflected the tendency of the Bitcoin power-law to overpower short-term volatility. The same investor would also accumulate 7.7x their initial capital over the 10-year period, showing how the model rewards patience.

💰 When entering 20% below $94,000, the outcomes improved dramatically due to the trajectory described by the Bitcoin power-law. Final totals ranged from $1.15 million to $1.47 million depending on the exit scenario. Even purchasing exactly at $94,000 produced returns between $924,000 and $1.18 million. In each case, the Bitcoin power-law trendline itself was responsible for most of the long-term performance.

🧠 As Sminston With summarized, “Don’t stress too much about the entry point. Let time do the heavy lifting.” This philosophy echoes what the Bitcoin power-law model captures: over long timeframes, structural BTC growth tends to overshadow differences in initial timing.

🌍 Global Liquidity and the Bitcoin Power-Law Trend

🌐 A second dimension of this research looks at macro liquidity, a factor deeply tied to the Bitcoin power-law narrative. Global liquidity today is estimated around $113 trillion—roughly $7 trillion higher than when Bitcoin last traded near its current range. Elevated liquidity typically supports risk assets by boosting credit availability, appetite for investment, and overall economic expansion.

💧 Analysts believe that such liquidity conditions create a supportive backdrop, reinforcing what the Bitcoin power-law already suggests about long-term upside. An accommodative macro environment historically aligns with strong Bitcoin performance, even if near-term volatility persists. In this context, the Bitcoin power-law model appears even more convincing.

📉 However, something unusual has emerged: Bitcoin is experiencing one of the deepest liquidity dislocations of the cycle. According to JV Finance, BTC’s liquidity gap has widened to –1.52 standard deviations, suggesting Bitcoin’s market value is significantly below what global liquidity levels imply. This is highly relevant because the Bitcoin power-law model often tracks liquidity trends over long periods.

📊 On Monday, the deviation briefly hit –1.68 standard deviations, marking the most extreme undervaluation of the current cycle. For analysts following the Bitcoin power-law, this disconnect signals that Bitcoin could be undervalued rather than overvalued, despite its recent drawdowns. Historically, deep negative deviations have strongly correlated with long-term upward corrections.

💵 Based on liquidity-adjusted models, the current “fair value” of Bitcoin sits near $170,000—far above spot market prices. This aligns with the Bitcoin power-law trajectory for mid-cycle valuations, reinforcing the argument that BTC may be trading at a long-term discount.

📈 What the Bitcoin Power-Law Means for Investors Now

🔍 For long-term investors, the most important message from this study is that the Bitcoin power-law tends to smooth out market noise. Even extreme short-term volatility or suboptimal entry points did little to change the 10-year projection outcomes. Across multiple scenarios, returns remained strong and consistently positive.

📆 The takeaway for those observing the Bitcoin power-law is that time, liquidity, and structural BTC adoption patterns play a more substantial role than attempting to perfectly time market cycles. In an environment of expanding global liquidity and persistent undervaluation, the long-term case—at least according to the Bitcoin power-law—may be stronger than many expect.