Rethinking Bitcoin Valuation: Liquidity, Power Law, and Energy-Based Models

by Brunello Rosa and Nato Balavadze

In this paper, we discuss:

• How Dollar strength acts as a short-term brake, creating a push–pull dynamic that explains volatility even during liquidity expansions;
• The failure of the Stock-to-Flow model and the rise of the Power Law as the preferred framework for long-term valuation;
• Evidence that Bitcoin is trading below fair value under the power law, consistent with a mid-cycle phase;
• Energy-based valuation models, which treat Bitcoin as stored energy and imply materially higher long-term value as institutional adoption grows.

Download PDF: Bitcoin Pricing – January 2026