Bitcoin’s success – is its price a pure algorithm?
The key to understanding Bitcoin’s valuation is not quarterly reports, but network dynamics. For years, analysts have suggested that this cryptocurrency does not behave like a traditional company share, but like a telecommunications network. This phenomenon is described by Metcalfe’s law, according to which the value of a network increases in proportion to the square of the number of its users. This means that each new participant in the system not only adds his presence to the system, but increases the usefulness of the network for everyone else. The math here is clear: value grows much faster than the sheer number of people using the protocol, laying the foundation for long-term price increases.
Groundbreaking research from 2026
The latest publication by Giovanni Santostasi and Stephen Perrenod from the Scientific Bitcoin Institute sheds new light on this process. The researchers analyzed data from fifteen years of Bitcoin’s existence, examining daily price changes and address activity. The results are surprising. It turns out that Bitcoin’s user base is not growing exponentially, as commonly believed, but cubically. This means that the number of people on the network increases at the rate of time raised to the third power. When we combine this with the generalized Metcalfe’s law, where the price scales with the number of users to the power of about 1.84, we get a result close to 5.69. This is almost exactly the price increase that has actually been observed on the market over the last decade and a half.
Adoption as the spread of ideas
Understanding why the math points to cubic rather than exponential growth requires looking at how people adopt new technologies. Bitcoin is not spreading like a sudden epidemic, but more like a complicated idea. This process begins with a densely connected group of technical enthusiasts and only then spreads to broader, less interconnected circles of users. This shows that Bitcoin’s development is an organic and social process, not just a financial one.
Mathematics winning over market chaos
The conclusions drawn from the analysis of empirical data are clear: the long-term price of Bitcoin is the result of real adoption, and not just market speculation. Mathematics allows us to see that all the sharp jumps and painful declines are just noise around a main, stable trend. The market has a natural tendency to return to the average determined by the mathematical model of network growth. While investor emotions often take over in the short term, what ultimately remains the bottom line is the number of people using technology and how they connect into a global value exchange network.
