Andreessen Horowitz Report: Bitcoin Growth Model

Index
    Рост биткоина Andreessen Horowitz
    Bitcoin growth Andreessen Horowitz

    US venture company Andreessen Horowitz investigated the history of bitcoin, taking into account the change in its price, community activity , developers and cryptocurrency companies. They divided all 11 years of BTC's existence into three cycles and established a model according to which the value of the first cryptocurrency is steadily increasing.

    In this article, we will analyze the bitcoin price model from Andreessen Horowitz, consider each of the cycles they set separately, and draw conclusions. What if their study confirms Acemoon No. 4 soon?

     

    Model

    Модель развития рынка криптовалют
    Model for the development of the cryptocurrency market

    Based on the study of bitcoin and related ecosystem , cryptocurrency analysts Andreessen Horowitz built the following growth model for its value:

    Модель роста стоимости биткоина Andreessen Horowitz
    Bitcoin value growth model Andreessen Horowitz

    Price increase leads to growing interest, more and more people are learning about bitcoin. Among them are those who are not just going to buy and hold , but also have ideas for improving the cryptocurrency infrastructure.

    ☝️
    The best example is Vitalik Buterin , who first became interested in the original bitcoin, and then became the author Ethereum .

    Further, the idea gives rise to new projects, which include new cryptocurrencies , exchanges , exchangers and other services. Due to the appearance and work of which interest in bitcoin is becoming even stronger, new people come to the industry and push the price up to the next maximum.

    Thus, we get a closed model in which everything starts with an increase in value and ends with an even higher price. And it seems to us that Andreessen Horowitz managed to derive a rather slender and understandable model, on the basis of which we can explain the periodic price spikes that we used to call the native.

    ☝️
    But in their understanding, cryptocycles did not come from tuzemun to tuzemun, but were divided into periods of community and developer activity.

    Cycles

    Циклы развития биткоина
    Bitcoin development cycles

    According to their methodology, the first bitcoin cycle lasted from 2009 to 2012 :

    Первый цикл роста биткоина согласно модели Andreessen Horowitz
    The first cycle of bitcoin growth according to the model Andreessen Horowitz

    The first serious one came in its middle a surge in prices, after which many realized that bitcoin could be a financial instrument. After that, the first organized miners, trading floors, and wallets appeared on the market. And their activity did not decrease after the price drop, on the contrary, they continued to work on the development of the industry and this brought its result.

    The second cycle lasted from 2012 to 2016 and, according to analysts, during it the main and most famous crypto projects appeared today:

    Второй цикл роста биткоина согласно модели Andreessen Horowitz
    The second cycle of bitcoin growth according to the model Andreessen Horowitz

    Here, analysts remembered Ethereum, and we want to say about Ripple with their token XRP [19459013 ]. They appeared in 2012 and Andreessen Horowitz was one of the earliest investors in this project. But, apparently, they were modest and did not focus on this.

    And as we see on this chart, after the Bitcoin exchange rate for the first time in its history took the mark of $ 1,000, so immediately the activity in the community, among developers and companies, sharply increased.

    And the third cycle, which is familiar to the majority in the crypto community, lasted from 2017 to 2019:

    Третий цикл роста биткоина согласно модели Andreessen Horowitz
    Third Bitcoin growth cycle according to the model Andreessen Horowitz

    In his center, bitcoin for $ 20,000 in December 2017, after which there was the largest boom in interest today among developers and companies, 10 times the previous activity. The report states that during this third cycle, cryptocurrencies became a full-fledged industry.

    Conclusions

    Развитие рынка биткоина Andreessen Horowitz
    Bitcoin market development Andreessen Horowitz

    Do you know what we liked about this report? The report concludes with a schedule of changes in key cryptocurrency industry metrics over all three periods:

    Изменения ключевых метрик индустрии криптовалют согласно Andreessen Horowitz
    Changes in key cryptocurrency industry metrics according to Andreessen Horowitz

    ] According to these data, the industry develops every year in different ways, but in the long-term perspective we see a rise in the price of bitcoin by 196%, an increase in social activity by 207%, and an increase in the involvement of developers and companies by 74% and 54%, respectively.

    With the rise in the price of bitcoin in the entire history, analysts Andreessen Horowitz were obviously greedy - it is measured in thousands of percent. But this is their study, so let them consider how convenient it is for them.

    And we want to draw your attention to the fact that their model, when price increases create interest in the industry, which then translates into a new maximum value, has already worked twice. And according to these cycles, we are now at the beginning of the fourth, the price surge of which will be around 2021 or 2022. Just when, according to most forecasts, the next native is supposed to happen.

    Bitcoin Market Development Andreessen Horowitz
     

    And we want to note one more thing. During the first cycle, the entire infrastructure was built around bitcoin, in the second round new cryptocurrencies appeared, without which we can not imagine the market today. The third cycle was the heyday of all kinds of services: exchanges, wallets, games and decentralized finance. But also, during it the first regulated trading floors appeared, such as CME and Bakkt .

    This trend, in our opinion, will continue and will become the main one in the current cycle and will mean cryptocurrencies coming out of the shadow. If previously cryptocurrencies proved that they are a full-fledged self-sufficient industry, now it is time to finally get out of the shadow and become on a par with traditional financial markets.

    Read also:

    This is important: three threats to Bitcoin

    Bitcoin: three reasons for growth [19459009 ]

    Derivative boom: a threat or new opportunities for the market

    See also  “Whales” on the crypto market: how decentralized is bitcoin

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