Most investors think in terms of CAGR — it is how most equities and other financial instruments grow. Bitcoin is different: perhaps uniquely among major assets, its entire price history has tracked a power law — a high but declining growth rate along a rising trend, with price oscillating around that trend. So the useful question is not “what return does bitcoin give” but a two-part one: where is bitcoin’s price relative to trend right now — and if it returns to trend, by when?
Below trend, reversion implies an elevated near-term CAGR — the “discount” case. Above trend, the identical arithmetic implies a depressed or even negative one — the “premium” case. Both come out of the same formula with no special-casing.
What the Power Law puts the trend price at today.
Bitcoin is currently at the bottom of its historical channel. The floor has held for the length of the record — which is evidence, not a law. See the Power Law caveats for what would falsify the model.
If — or when — it returns to trend…
—Drag to choose how fast the return happens. Nothing here predicts that it will — the speed is your assumption, and the arithmetic below is its consequence. Fast reversions look extreme because they are extreme. It has happened before: from the Nov 2022 low (0.41× trend), price was back at trend within about 16 months.
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The full curve, so the slider is always read in context. The amber line is the implied CAGR at every horizon; the dashed blue line is the at-trend implied CAGR. Neither line is flat: the baseline itself declines gently as the horizon extends — see “Why the baseline itself keeps falling” below. The curve flattens toward the baseline as the horizon lengthens — the further out you push reversion, the less of an impact it has.
Price on a log axis over the whole record: the thin muted line is price history, the amber line is the trend, the dashed red line is the 0.42× floor (historical), and the faint dashed line is the 3.0× upper band. The dashed amber path is the assumption you chose, drawn as a line — illustrative, not a forecast. The fainter path is the never-reverts case: the multiple stays where it is. Markers flag the three canonical cycle lows and the points where price later regained trend. Past returns to trend took about 5 months (from the Dec 2018 low), 16 months (from Nov 2022), and 28 months (from Jan 2015) — the slider’s range brackets all three.
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What this lens said at past extremes
Every figure below is computed by the same code that drives the slider above, run against the market’s four cyclical tops and three cyclical lows. The same arithmetic that reads high today read deeply negative at every major top — and strongly positive at every major low. The same formula, at every extreme.
| Moment | Multiple of trend | Implied CAGR if trend is reached within… | ||
|---|---|---|---|---|
| 1 year | 2 years | 3 years | ||
Read it like this: buying the Dec 2017 top meant even a full reversion within a year implied −71%/yr; buying the Dec 2018 low, the same reversion implied +205%/yr.
Implied CAGR of a return to trend from each moment, at one-, two- and three-year horizons. Top and low anchors are the site’s canonical cyclical-extreme set, shared with Bitcoin vs. The Stock Market and Bull & Bear Cycles; multiples and rates are computed from the model, not asserted.
Why the baseline itself keeps falling
The at-trend baseline above is not a constant. The Power Law describes growth that is proportional but decelerating — each doubling takes longer than the last — so the trend’s own annual rate declines by construction, whatever price does around it. Taking today’s number and extending it across decades overstates the case badly.
Annualised growth of the trend line itself across successive four-year windows, computed live. This is the rate you earn if the multiple never changes — and it is the reason a single “bitcoin’s CAGR” figure is always incomplete without a date attached. For the trend structure behind it, see The Doubling Ladder.
Common questions
Is bitcoin at a discount or a premium right now?
The page computes it live: bitcoin’s price divided by its long-run Power Law trend. Below 1.0× is a discount to trend, above is a premium — and the answer changes over time, which is why this page computes rather than asserts it.
What is mean reversion in bitcoin terms?
Bitcoin’s price has oscillated around a remarkably steady long-run trend for its entire history — running far above it in manias and far below it in bear markets. Mean reversion is the tendency to return toward that trend; this page shows what a return would imply mathematically, at whatever speed you assume. It is a historical pattern, not a guarantee.
What CAGR does reverting to trend imply?
That depends on where price sits and how fast it reverts — which is exactly what the slider explores. From a deep discount, reversion implies returns well above the trend’s own growth rate; from a premium, it implies returns below it, sometimes sharply negative. The same arithmetic, both directions.
Is a big discount a buy signal?
No — and this page refuses to treat it as one. A discount can persist or deepen, the floor is historical rather than guaranteed, and reversion timing is unknowable. What the page offers is honest arithmetic about the possibilities, including the one where nothing reverts at all.
- The model. Every figure is the canonical Power Law trend re-expressed in CAGR terms — no new coefficients, no second model. The trend, the channel, and the credit to Porkopolis Economics for the coefficients all live on The Channel.
- A model, not destiny. The Power Law is an empirical regularity that has held across bitcoin’s history. It is not a law of nature and it can break. The caveats set out what would falsify it.
- Reversion is your assumption. Nothing here predicts that price returns to trend, or when. The page computes the arithmetic consequence of a speed you choose, and shows the never-reverts case alongside it at all times.
- Not an entry signal. A discount is not a buy signal and a premium is not a sell signal. There are no buy zones on this page by design; for the entry question, see Wait, or Deploy Now?
- Price data. Live spot from CoinGecko, falling back to the latest monthly sample in the shared series — labelled honestly as “latest monthly data” whenever the live fetch does not resolve.