Bitcoin Diffusion Model: Three Complete Cycles
Model validation (2016, 2020) and current cycle predictions (2024-2026). Log scale chart.
✓ 2016 Cycle (Validated)
Halving: $650 (Jul 2016)
Actual Peak: $19,400 (Dec 2017)
Model Predicted: $23,179
Error: +19.5%
μ=23.3× · ∇C=1.53 · D=1.0
⚠ 2020 Cycle (Crisis Override)
Halving: $8,800 (May 2020)
Actual Peak: $69,000 (Nov 2021)
Model Predicted: $130,843
Error: +89.6%
μ=7.7× · ∇C=1.93 · D=1.0
Liquidity crisis disrupted diffusion
⏳ 2024 Cycle (In Progress)
Halving: $64,000 (Apr 2024)
Current Price: $124,000 (Oct 2025)
Model Predicts: $400k-$600k
Base Case: $575k
μ=2.0× · ∇C=2.53 · D=1.78
Peak: Q2-Q4 2026
📊 2024 Cycle: Diffusion Model Components
Empirical Maturation
μ = 2.0×
Curve-fitted (δ=0.26)
Concentration Gradient
∇C = 2.53×
Buffett 221% → 146pp excess
Diffusion Coefficient
D = 1.78×
ETF absorbing 78% of supply
Total Flux (J = D×∇C)
4.50×
Combined diffusion effect
Total Multiplier: 2.0 × 4.50 = 9.0× → $576,000 predicted peak
🔍 Key Model Insights:
• 2016: Excellent prediction accuracy (19.5% error) validates model in normal conditions
• 2020: Large overestimate (89.6%) demonstrates liquidity crisis failure mode—exactly as predicted
• 2024: Unprecedented diffusion forces (highest gradient + first ETF cycle) suggest exceptional price action
• Current price $124k = 1.94× from halving, approaching empirical 2.0× maturation factor
• Model remains unfalsified; falsification threshold: <$300k by Dec 31, 2026