Blockstream Capital Partners’ Senior Advisor Giovanni Santostasi and Quantitative Researcher Lev Ushakov joined Senior Advisor Alfonso Delgado at Global Alts Miami to discuss how the Bitcoin Power Law could predict long-term scaling behavior.
The Bitcoin Power Law, discovered by Santostasi, suggests that Bitcoin behaves more like a physical system rather than a typical asset or commodity, similar to how a city grows. The model suggests that every time the age of a coin doubles, the price increases by 65 times, meaning bitcoin could potentially reach $1 million in 8 years.
The discovery has been fundamental not only in advancing the understanding of Bitcoin but also for shaping Blockstream Capital Partners’ quantitative strategies, which aim to develop target level exposure. To manage drawdowns and mitigate risk, the firm gradually gets out of the market when Bitcoin is trading above its Power Law reference point, under the assumption that price will eventually revert to the reference point. This strategy seeks to accumulate more bitcoin over time and while improving risk-adjusted returns.
