Bitcoin's Power Law: Weak Structure, Strong Forecasts
A recent study examines Bitcoin's price behavior through the lens of power law statistics. The findings suggest that while Bitcoin's price may initially appear to follow a power law, the structure is weak and not robust across different time frames. The research indicates that alternative models may provide better forecasts for Bitcoin's price movements over longer horizons.
- ▪The study tests the claim that Bitcoin's price follows a power law from 2010 to 2026.
- ▪Results show that the distributional power law is rejected for UTXO balances and daily returns, favoring a lognormal distribution.
- ▪The fitted time-domain exponent varies significantly, indicating a lack of robustness in the power law specification.
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Statistics > Applications arXiv:2605.21316 (stat) [Submitted on 20 May 2026] Title:Bitcoin's Power Law: Weak Structure, Strong Forecasts Authors:Carlos Baquero, Raquel Menezes View a PDF of the paper titled Bitcoin's Power Law: Weak Structure, Strong Forecasts, by Carlos Baquero and 1 other authors View PDF HTML (experimental) Abstract:Bitcoin's price has been described as following a power law (PL) in time, $P \sim t^{\beta}$ with $\hat\beta \approx 5.7$ over 2010-2026. We test this claim using the Clauset-Shalizi-Newman protocol applied to Bitcoin's tail-relevant distributional series, and develop three principled time-domain adaptations of the protocol.
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