P(t) is the price of one bitcoin at age t (born 2009)
∝ means grows like
N is the number of holders — everyone who has adopted bitcoin, people and funds alike. It grows like t × t × t — the idea conquers minds like an epidemic.
W is the total fiat wealth of those holders, drawn from the human wealth pyramid — Pareto’s law, α ≈ 1.2 measures how steep it is. Each new wave reaches deeper into bigger pockets, so W grows faster than the crowd. Bitcoin’s value V tracks it: each holder commits a fixed slice.
Only 21M bitcoin will ever exist — so the price of one coin tracks Bitcoin’s total value V, and the whole law above follows: P = V / S, S → 21M ⇒ P∝V∝W
TheoryP(t)∝t5.5 · Observed over 16 yearst5.6 ± 0.2