Estimating a Network Adoption Curve through Price Trends “Lowest Price Forward: Why Bitcoin’s Price is Never Looking Back”

Abstract

This study presents an innovative approach to estimating network adoption curves by analyzing price trends without referring to specific assets or fundamental historical data points. It introduces a methodology centered on identifying the lowest price points within a given temporal framework and explores their significance in understanding long-term growth patterns in network-based assets. By employing a unique "square root time" scale, the research offers a nuanced perspective on the adoption rates and intrinsic valuation of networks, drawing parallels to the diffusion processes observed in technology spread.

Keywords: bitcoin, cryptocurrency, valuation, growth model, network economics, network effect

JEL Classification: C22, C49, C51, C53, C58, D85, E40, E42, E49, E51, G12, G17, L14