Bitcoin projected to reach $1 million in two years according to new Satoshi Action Fund framework.

A novel supply-and-demand equilibrium model indicates that Bitcoin could exceed $1 million by January 2027, in line with current trends in adoption, liquidity, and Bitcoin reserves.

A recent study by Dr. Murray A. Rudd and Dennis Porter from Satoshi Action Education combines Bitcoin’s fixed, inelastic supply schedule with dynamic demand elements, such as institutional adoption and long-term holding patterns, to predict price movements following the halving event.

The framework of the model utilizes fundamental economic principles to assess Bitcoin’s limited supply and examines how incremental shifts in demand or daily withdrawals into strategic reserves may influence long-term valuations.

Analyses take into account various factors, including the volume of Bitcoin taken out of exchange circulation and the impact of changing demand curves over a 12-year period. Findings indicate that even slight daily withdrawals from Bitcoin’s liquid supply, coupled with an increasing institutional presence, could propel the price toward seven-figure amounts in under three years.

A significant withdrawal of Bitcoin from active trading, along with rising demand, creates scenarios where the price might exceed $1 million by early 2027, and tighter liquidity suggests even higher values if adoption accelerates.

With more aggressive assumptions regarding reserves and adoption, the price could potentially reach $2 million by 2028 and move into multimillion-dollar ranges by the early 2030s if sustained demand growth continues to surpass the increasingly limited supply.

Forward-looking Bitcoin price model

This methodology contrasts with traditional backward-looking statistical models. Instead, it employs first principles, viewing Bitcoin as a commodity with a strict issuance limit of 21 million coins. Conventional models typically emphasize historical trends, while this forward-looking approach considers structural demand changes and strategic accumulation by corporations, funds, and sovereign entities.

The inelastic nature of Bitcoin’s supply curve implies that incoming demand cannot be satisfied through additional production, which may result in rapidly increasing prices and market conditions where minor shifts in demand or supply can lead to significant volatility. This modeling technique also differs from energy-based or network-based models, providing a fundamental perspective for analyzing the relationship between scarcity, adoption, and liquidity.

Practical implications involve guiding investors and fund managers who aim to comprehend the relative effects of policy changes, credit-driven demand, and strategic treasury management on Bitcoin’s price.

The capacity to experiment with various assumptions within this framework offers adaptability. Adjustments to real-world data can be conducted periodically, enabling decision-makers to integrate emerging trends into their forward-looking asset allocation strategies.

As MicroStrategy and other institutions showcase methods for acquiring Bitcoin through credit expansion or corporate treasury restructuring, and as governments contemplate strategic Bitcoin reserves, such modeling may prove beneficial.

Other forecasts, including power-law models that extrapolate from historical data, have suggested targets in the seven-figure range over a similar timeframe. MicroStrategy’s macro-based baseline scenario aligns with a future where Bitcoin reaches multimillion-dollar valuations. These correlations with external projections bolster the credibility of employing supply-and-demand equilibrium modeling as part of a broader analytical toolkit.

While the model’s initial findings emphasize conditions that could lead to rapid price increases, uncertainty persists regarding lost or permanently held coins, the timing and scale of institutional adoption, and potential regulatory changes.

Model enhancements may involve more nuanced representations of evolving demand elasticity or dynamic withdrawal rates linked to dollar-based investments rather than fixed Bitcoin amounts. Incorporating uncertainty through Monte Carlo simulations, scenario analysis, or periodic recalibration can improve realism.

The authors’ projections, available in supplementary datasets, present one scenario where Bitcoin’s constrained supply aligns with a future characterized by strategic accumulation and demand shifts driven by adoption.

Whether institutions and governments engage in consistent daily purchases or whether adoption parameters increase linearly or follow a logistic path, the framework illustrates the inherent tension between fixed supply and rising demand.

The findings indicate a long-term investment case with the potential for significant appreciation and volatility as new market participants apply pressure on the finite supply of the digital asset.

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