What is the Bitcoin Power Law investment strategy?

The Bitcoin Power Law strategy uses a mathematical model that tracks Bitcoin's long-term price trend. It identifies when Bitcoin is undervalued (buy zones), fairly valued (hold zones), or overvalued (sell zones) relative to this trend line, helping investors make systematic decisions rather than emotional ones.

What is a liquidity buffer and why do I need 24 months?

A liquidity buffer is cash and yield-generating assets covering your living expenses. The 24-month target is derived from historical Bitcoin bear markets lasting 12-18 months. Having 24 months of runway ensures you never need to sell Bitcoin at depressed prices during downturns.

What are volatility regimes in the Power Law strategy?

Volatility regimes (High, Medium, Low) describe Bitcoin's current market behavior. High volatility means larger price swings and opportunities for aggressive positioning. Low volatility suggests consolidation phases where patience is key. The strategy adjusts risk levels based on the current regime.

What is the 6% annual sale cap rule?

The 6% rule limits how much Bitcoin principal you can sell per year to preserve long-term holdings. When selling above fair value, only the principal portion counts against this cap—gains harvested from premiums are exempt, encouraging profit-taking at cycle tops.

What is Compression Accumulation?

Compression Accumulation occurs when low volatility coincides with prices near power law support (≤0.5x fair value). This rare condition often precedes major bull runs, as seen in 2015-2016 before the 2017 rally. It signals aggressive spot buying without leverage.

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Last Updated: November 30, 2025

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