Dear Readers,
With BTC currently breaking to new highs, people are naturally focused on possible peak price, for as we all know - Bitcoin is volatile. This article will look at the way in which the peak can be both under-estimated on the one hand, and over-estimated on the other. In the first case of under-estimation, I’ll describe the way in which money illusion, the focus on nominal values as opposed to real values, contributes to this. In the second case of over-estimation, I’ll describe how a bias toward non-diminishing returns [or regularity of returns] leads to a possible exaggerated expectation.
If these two cases provide the extremes, then a more modelled and technical projection of peak prices will lastly seek to provide a moderate and realistic price projection between them.
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