Metcalfe's Law Model Predicts Modest 1.1% Annual Bitcoin Return Over 100 Years Despite Price Swings

Bitcoin's projected annualized return over 100 years is just 1.1% according to a "Metcalfe's Law" valuation model.

The model assumes each mined bitcoin represents a network user, though this is an imperfect measure.

The model has effectively predicted highs and lows in bitcoin's price, though still expects wide oscillations.

Currently the model says bitcoin's fair value is around $31,400, about 14% above its current price.

Even at fair value, bitcoin may still trade at extremes far above and below, similar to historic stock market valuation swings.