In a forecast published Friday by X, Timothy Peterson, a respected network economist and prominent author on cryptoanalysis, predicted an almost certain rise in the price of bitcoin over the next eight months. “There is a 90% chance that bitcoin will reach a new all-time high before March 2025,” Peterson said. It was proclaimed.

Peterson, known for his work including “Metcalfe’s Law as a Model for Bitcoin’s Value,” bases his prediction on an analytical framework detailed in his research paper titled “Lowest Price Forward: Why Bitcoin’s Price is Never Looking Back.” First published in 2019 and subsequently revised, the paper introduces an inventive approach to understanding bitcoin’s price trajectory by focusing on its historical lows, known as the “Never Look Back Price” (NLB). This NLB represents the last time bitcoin traded at a specific price point and never fell to that level again.

Peterson’s methodology involves plotting these NLB data points on a lognormal scale, adjusted for what he calls the “square root time” scale. This unconventional metric facilitates deeper insight into Bitcoin’s long-term growth patterns, effectively comparing them to the diffusion processes observed in technology adoption in other domains.

Bitcoin adoption is key

Central to Peterson’s analysis is Metcalfe’s Law, which he elaborates on as follows: “the value of a network is proportional to the square of its users.” Applying this principle to Bitcoin, Peterson posits that as the digital currency’s user base grows, its intrinsic value is likely to raise exponentially. The paper details the application of the “square root of time” model to adapt classic time-value concepts of money to the nonlinear growth rates typical of network economies, presenting a compelling argument for Bitcoin’s future valuation trajectories.

Peterson’s approach incorporates elements of conservative financial analysis, emphasizing Bitcoin’s historical lows. “By focusing on the low, the analysis inherently takes a conservative approach, underestimating rather than overestimating value,” Peterson notes, which helps “minimize the risk of overvaluation and ensures that forecasts do not overly rely on optimistic scenarios that may not materialize.”

In his article, Peterson also addresses potential anomalies and market manipulations that could distort price perceptions. By focusing on NLB, the analysis filters out such distortions, offering a cleaner picture of bitcoin’s growth that is not affected by short-term speculative pressures or external shocks such as the COVID-induced market anomalies of 2021.

The prediction of a recent all-time high before March 2025 reflects Peterson’s broader sense of confidence in the continued growth of the Bitcoin network. As adoption curves continue to rise and network effects further solidify Bitcoin’s value, the prediction is not merely speculative, but based on measurable and observable historical trends.

Peterson concludes: “As long as adoption continues, the value of Bitcoin—represented by the NLB price—will increase. If adoption is hindered, the price will stagnate or decline.”

At the time of going to press, the BTC price was $58,192.

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