A new peer-reviewed study published in the Journal of Risk and Financial Management contends that Bitcoin’s scarcity, coupled with the possibility of dramatic demand shifts, may drive its price past one million dollars by January 2027 under certain conditions.
Titled “A Supply and Demand Framework for Bitcoin Price Forecasting” and authored by Dr. Murray A. Rudd and Dennis Porter of Satoshi Action Education, this paper leverages a strictly economic methodology to examine how Bitcoin’s total inelasticity of supply interacts with the asset’s ongoing institutional and sovereign adoption. The authors write that “it is not possible to change the supply schedule” and emphasize the potential ramifications of any race to secure what they call a “perfectly inelastic” store of value.
Why Bitcoin Could Hit $1 Million In 2027
Unlike purely historical or statistical models that extrapolate from Bitcoin’s past price fluctuations, Rudd and Porter rely on the well-established theory of market equilibrium, taking specific account of Bitcoin’s “immutable 21-million-coin supply” and observable patterns in how coins are permanently held or lost.
In describing how their model differs from approaches such as Stock-to-Flow or power-law regressions, the authors insist that “there is a pressing need for a Bitcoin pricing model that (1) is based on established supply and demand theory, (2) can be calibrated to observed Bitcoin price performance, and (3) is flexible enough to allow investors to experiment with a range of assumptions regarding price determinants and model parameterization.” They explicitly point out that “Bitcoin’s future is quite unlikely to resemble its past,” hinting that reliance on purely historical data could be misleading when institutions and nation-states begin to accumulate on a scale never observed before.
Under the model, the liquid portion of Bitcoin’s supply is the focal point for price formation: because a number of coins are verifiably “lost forever” and many more are “HODLed” by long-term holders unwilling to sell, the effective supply can be far smaller than aggregate issuance. The authors state that “given anecdotal evidence, it may be reasonable to assume that only about half of Bitcoin’s total supply is liquid at this time,” although they are also careful to call this an inherently uncertain figure.
They propose that even moderate removal of coins from circulation can induce substantial price surges. By way of example, the study notes that “modest withdrawals from liquid supply to strategic reserves could lead to substantial price appreciation over the medium term,” while “higher withdrawal levels may induce volatility due to supply scarcity.” In a scenario deemed bullish, in which larger daily amounts of Bitcoin are continuously taken off the market, the authors calculate that the $1 million- price threshold could be reached as early as January 2027, particularly if simultaneously accompanied by strong growth in the parameter they call the “demand shift.”
The paper’s authors rely on a constant elasticity of substitution (CES) function to map possible price trajectories through time. They start with the known price and presumed liquid supply at the April 2024 halving—where Bitcoin traded at around $64,858 —and then iterate forward in a discrete daily schedule, taking account of the reduced mining rewards and possible step changes in institutional behavior.
“We set 20 April 2024, the date of the fourth halving, as the framework’s starting point,” the authors write, explaining that subsequent daily outcomes for price can be tested under adjustable assumptions for how quickly adoption accelerates, how inelastic the demand becomes, and how many coins are withdrawn from the marketplace for permanent reserves. The study devotes many pages to analyzing what happens when “demand curve expansions” coincide with daily withdrawals exceeding one or two thousand BTC, concluding that the combination of these forces can move the Bitcoin price into what they refer to as “hyperbolic” growth territory.
Although the analysis centers on medium-term time horizons, from 2024 to about 2036, the authors repeatedly emphasize that any model benefits from ongoing calibration. “There are families of unobservable demand functions passing through an observed price point,” they write, arguing that more data on institutional positions and more robust identification of lost coins will strengthen forecasts. The paper also acknowledges the possibility that “hyperbolic price increases” might be curbed by regulatory actions, by previously lost coins returning to the market, or by large reserve holders liquidating if prices rise too far, too fast. At the same time, the authors leave no doubt that they see rising demand and diminishing liquidity as a defining axis of Bitcoin’s future behavior.
The most conspicuous conclusion is that this inelastic-supply design, coupled with the intensifying possibility of credit-based accumulation by companies and governments, could drive much sharper price moves than traditional models suggest. “Even without precise quantification, recognizing this mechanism reframes Bitcoin’s growth not as a zero-sum competition with traditional assets but as part of a broader expansion of the financial system’s liquidity,” the paper asserts, alluding to the idea that new debt issuance might fund Bitcoin purchases rather than forcing investors to sell other assets. The net result, it says, is “increasing demand intensifying the impact of Bitcoin’s constrained liquidity,” a dynamic that is difficult to neutralize because Bitcoin’s protocol does not permit any rise in the newly minted supply.
Whether Bitcoin does indeed surpass the million-dollar mark by early 2027 remains to be validated by actual market conditions, yet the authors’ emphasis on fundamentals-based modeling brings a new level of theoretical precision to the debate. “By advancing a fundamentals-based approach, this study contributes to the broader understanding of how Bitcoin’s supply–demand dynamics influence market behavior,” they conclude, suggesting that their framework could, over time, bring greater coherence to discussions of Bitcoin’s long-run valuation.
At press time, BTC traded at $104,633.
