Following current trends, a new supply-and demand equilibrium model predicts that Bitcoin will surpass $1 million in January 2027.
A recent paper by Dr. Murray A. Rudd and Dennis Porter of Satoshi Action Education integrates Bitcoin’s fixed, inelastic supply schedule and dynamic demand factors, including institutional adoption and long-term holding behavior, to forecast price trajectories post-halving.
The model’s framework applies fundamental economic theory to Bitcoin’s limited supply and evaluates how incremental demand shifts or daily withdrawals into strategic reserves may affect long-term valuations.
The analysis takes into account multiple factors, including the amount of Bitcoin that is removed from the exchange and demand changes over the course of a 12 year horizon. Results suggest that even modest daily withdrawals from Bitcoin’s liquid supply, combined with growing institutional presence, could drive the price toward seven-figure levels in less than three years.
With the removal of Bitcoins from trading and growing demand, it is possible that prices could reach $1,000,000 by 2027. If adoption increases, there will be even more liquidity constraints.
If reserves are increased and the adoption rate is increased, then the price of the product could be $2 million in 2028. It may even reach multimillion dollar levels by early 2030 if the demand continues to grow faster than the supply.
Bitcoin Price Model: A Forward-looking Bitcoin Model
The approach is different from the traditional statistical models that look backwards. It uses first principles and treats Bitcoin like a commodity, with strict limits on the number of coins that can be issued. This forward-looking model takes into consideration structural demand shifts and the strategic accumulation of corporations, funds, or sovereign entities.
The inelasticity of Bitcoin’s supply curve means incoming demand cannot be met through additional production, potentially leading to rapidly rising prices and market conditions where small shifts in demand or supply can cause substantial volatility. Models based on energy or networks are not as effective in analyzing the relationship between scarcity, adoption and liquidity.
Practical implications include informing investors and fund managers who seek to understand the relative impacts of policy changes, credit-driven demand, and strategic treasury management on Bitcoin’s price.
This framework allows for flexibility by allowing users to test out different assumptions. The calibrations can be performed periodically to reflect real-world information, which allows decision makers to integrate emerging trends in their asset allocation strategies.
Modeling may be useful as MicroStrategy or other institutions show how to obtain Bitcoins by expanding corporate credit lines, restructuring corporate treasurers, and when governments think about strategic Bitcoin reserve.
Other projections such as models based on power laws that extrapolate historical data have given targets for the seven-figures range in a similar period of time. MicroStrategy’s macro-based baseline scenario aligns with a future multi-million-dollar Bitcoin. The parallels between the supply and demand equilibrium model and outside projections strengthens its credibility as a tool in broader analysis.
Although the model’s initial results highlight conditions that can drive rapid price growth, uncertainty remains regarding lost or permanently held coins, timing and scale of institutional adoption, and potential regulatory changes.
The model refinements can include more accurate representations of demand elasticity, or dynamic withdrawal rates linked to dollars-based investment rather than fixed bitcoin quantities. Integrating uncertainty via Monte Carlo simulations or scenario analysis can improve realism.
The authors’ forecasts, available in supplementary datasets, present one scenario where Bitcoin’s constrained supply meets a future marked by strategic accumulation and adoption-driven demand shifts.
The framework shows the tension inherent between a fixed supply and an increasing demand, whether institutions or governments are committed to daily purchases that will continue or if adoption parameters follow a linear or logistic growth trajectory.
The findings suggest a long-term investment case with the potential for substantial appreciation and volatility as new market participants exert pressure on the digital asset’s finite supply.
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