I just saw an interesting analysis on Plan C about the growth patterns that Bitcoin follows. The key is understanding the difference between two completely different dynamics: a power law versus a parabola.

What they propose is quite logical. A power law is that sustainable growth that persists over years, while a parabola is the opposite, an exponential takeoff compressed into a short period. The point is that gold has barely shown parabolic behavior in the last decade, only recently starting to do so.

Bitcoin, on the other hand, has a different history. Its growth is strong, yes, but it has been more sustained over time, following that power law I mentioned. The interesting thing is that Bitcoin has had several parabolic peaks throughout its history, and almost always those explosive moves ended up being unsustainable, preceding bear markets.

This is important because it shows us a pattern: when you see a very pronounced parabola in Bitcoin, historically it has been a sign that what rises very quickly tends to correct sharply. It’s the nature of the market. The Plan C analysis makes it clear that although Bitcoin has had aggressive rallies, its long-term trend remains more orderly than that. Something to keep in mind.