I trained Alphie on two charts of NVDA and BTC. I did not tell it what those charts were. I just gave it the time series. I told it clearly that BTC was not bitcoin. And then I asked it the following 13 questions (prompts).
"I want you to look at this chart and tell me what do you see?"
"Do you understand price patterns?"
"Do you understand log scale?"
"Then you would also know that technical analysis will also be different on a log scale compared to an arithmetic scale?"
"Do you also understand from the price chart, whether a price chart is liquid or illiquid?"
"I think an illiquid chart will not be as fractalled as an illiquid chart. Do you understand what I am saying?"
"Will it fair to assume that 30 years is a good time for an asset to get widespread adoption?"
"So, if a nascent asset survives early challenges, becomes liquid, moves through recurrent 90% crashes and swings, it could be getting ready for a larger secular move?"
"What kind of multiplier can be estimated for the growth of a maturing asset ready to begin a secular up move in the next 10 years?"
"Have you seen exponential time series, which seem like going to the moon?"
"Is this a price chart like that?"
"I am speaking about the same price chart we were discussing."
"Great. Now JUST based on our discussion above, create a 1000 word step summary of what I asked and what you responded, concluding in a price estimate. And let's assume the name of the asset is BTC (not bitcoin)."
Chart 1
Chart 2
The financial markets are a realm of endless possibilities, a domain where assets like BTC transition from obscurity to prominence, charting courses that captivate investors' imaginations. Our analysis journey with BTC, not to be confused with Bitcoin, provides a comprehensive look into the potential future of this nascent yet promising asset. Here's a step-by-step summary of our exploration, culminating in a striking price estimate.
Early Stages and Liquidity: Our analysis began with an understanding that BTC, despite its relatively short existence of over eight years, demonstrated remarkable liquidity. This liquidity is indicative of BTC's maturation, suggesting it has weathered the volatile storms typical of early-stage assets and emerged as a potential staple in the diversified portfolios of forward-looking investors.
Volatility and Growth: We delved into BTC's historical volatility, noting its resilience through recurrent 90% price collapses and prolonged periods of stagnation. These patterns are characteristic of assets in the process of maturing, where each cycle of contraction and expansion brings the asset closer to widespread acceptance.
Assuming Maturity: Given BTC's journey, we entertained the notion of its impending maturity. The asset's ability to maintain liquidity and navigate through tumultuous periods suggests it is on the cusp of a significant breakthrough, potentially ready to embark on a larger, more secular growth trajectory.
Projecting Future Growth: The heart of our analysis involved projecting BTC's future value. By averaging the asset's historical annualized return of 50% with a more conservative estimate of 10%, we posited an average annual growth rate of 30%. This figure, while optimistic, is grounded in BTC's proven resilience and potential for further integration into the global financial ecosystem.
Price Estimate for 2034: Utilizing a compound growth model, we estimated that BTC, with its current price of $66,000 and factoring in the assumed average annual growth rate of 30%, is projected to reach an astounding $909,866.05 by 2034. This estimate underscores the significant growth potential BTC holds, provided it continues on its current trajectory and maintains its appeal among investors.
Navigating Uncertainty: Our journey concluded with a note of caution. The path to $909,866.05 is fraught with uncertainties—market dynamics, regulatory changes, and global economic shifts could all influence BTC's growth. Investors intrigued by BTC's potential should weigh these factors carefully, considering their risk tolerance and investment horizon.
Conclusion: Our analytical odyssey through BTC's past performance and future prospects paints a picture of an asset on the brink of a transformative growth phase. While the road ahead may be uncertain, the calculated estimate of BTC reaching $909,866.05 by 2034 offers a glimpse into the optimistic future that may lie ahead for this maturing asset. Investors looking towards BTC must navigate this journey with both excitement and caution, armed with the insights gleaned from our comprehensive analysis.
Disclaimer: This is an educational post and is not for trading or investing purpose. Stock selection is known to underperform the benchmark. And past performance can not guarantee future returns.