Does adoption cause price or price cause adoption in Bitcoin?

Giovanni Santostasi
2 min readMay 15, 2024



A longer article will follow soon (stay tuned) but I wanted to post this very interesting result as a reference.

The answer to the title question is complicated, or maybe not.

Here is a “Granger Causality Test” on a moving window of 1 year.

The test tells if a variable leads or “causes” another in a given region of time.

I tested both directions: addresses causing price (in red) and prices causing addresses (or adoption) in black.

The causality index here is the p-value of the test or how likely is that the result is due to chance. The smaller the number more likely is that the result (one parameter causes the other) is real and not due by chance. Notice how small the p-value is during the peaks.

The black is enormously smaller than the red when bubbles happen so it means during the bubbles “price causes adoption”.

During the bottoms, it the opposite happens, where the p-value of the black curve is not significant (less than 0.05) and the p-value of the red curve is significant meaning that “adoption causes prices”.

This is very fascinating, it makes sense and it shows how the different fundamental parameters play with each other in infinite feedback loops.

Adoption is the foundation of Bitcoin's growth.

It is what drives the fundamental valuation of Price.

This is the real power law and the bottom of the power law in time. This adoption brings in miners, that regulate their hash rate on this fundamental bottom price. Every 4 years there is an equivalent of Xmas. Miners get new rigs, the halving simply creates stability and equilibrium (it is not a punishment to miners but an anti-Moore or anti-free-lunch measure) that creates FOMO and excitement in the community, brings innovation and a burst of euphoria and energy to the system.

Price decouples from hash rate and adoption during the peak of the bubbles and it leads both of these on-chain parameters during this time. It is a fascinating and intricate system all ruled by power laws over the long term and by cyclic exponential behavior during the bubbles.

This is the story of Bitcoin.