Benjamin Cowen – a famous cryptocurrency analyst on YouTube, looked at the logarithmic regression range for the total market capitalization of cryptocurrencies in latest video mine. And based on his analysis, he thinks the total value of the digital asset market could reach $ 10 trillion in the next bull run.
What is the logarithmic regression range?
Logarithmic regression range is the range of values that the cryptocurrency market tends to collapse again when it is not in a bubble. That is shown by the green bands on the chart below.
This band forms a smooth path over time when plotted on a logarithmic scale. At the peak of the bubble period 2017-2018, the total market capitalization of cryptocurrencies has reached nearly 1 trillion USD. However, it has dropped back to the regression band and is currently at about $ 290 billion.
Profit declines after each cryptocurrency market cycle
Plotting the difference between the total market capitalization and the lowest point of the regression band in real time, we can see the peaks gradually becoming lower after each market cycle. This supports the theory of diminishing returns over time.
Assuming this behavior continues, we can predict a potential peak on the regression range for the next major rally. For example, this project of Cowen occurred in 2022, but of course, it could be earlier or later than this time, if it happened.
The potential outcome for this would be that the total market capitalization of the cryptocurrency reached about $ 10 trillion at the top of the next bubble. In this scenario, capitalization is likely to fluctuate in the regression range for some time before starting to climb above it.
But what about $ 100 trillion for Bitcoin?
According to PlanB's stock to flow (S2F) model, Bitcoin's market capitalization alone is predicted to amount to $ 100 trillion. Cowen's $ 10 trillion market cap for the entire crypto market may not sound very impressed by that prediction.
Of course, $ 100 trillion for Bitcoin still has a long way to go in the future. The S2F model's price increase prediction is due to a limited time-limited supply of BTC, which will be done through each halving – halving the block reward, expected to take place in May. next.
However, the $ 100 trillion prediction is not until the next two halving thereafter, or sometimes by 2028. So for now, a $ 10 trillion market capitalization by 2022 will need to be realized.
With the current Bitcoin dominance, if the total market capitalization reaches 10 thousand companies, the price of BTC will reach about $ 330,000, so that's something to look forward to.
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According to Bitcoinist
Translated by ToiYeuBitcoin