The key concept in the power-law formulation of Bitcoin's price action is that its long-term behavior is characterized by price changes that scale with a factor of α/t, where α ≈ 6.
In mathematical terms: ΔP ≈ (α/t) P.
This implies that the rate of returns decays over time, which is a core property of Bitcoin's dynamics.
While this may sound disappointing at first—suggesting diminishing returns—it is actually a feature, not a bug.
It enables Bitcoin to adapt to continuous expansion and growth, accommodating increasingly larger participants such as banks, financial institutions, and even governments.
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