Bitcoin's New Scarcity Narrative: Why PlanB's Model Still Suggests a 10x Bull Case

The Bitcoin market in 2025–2026 is at a crossroads. While critics argue that traditional valuation models like PlanB's Stock-to-Flow (S2F) framework are outdated in the face of evolving institutional demand and macroeconomic shifts, a closer examination reveals that scarcity-driven narratives remain central to Bitcoin's long-term price trajectory. This analysis explores why PlanB's S2F model still underpins a compelling 10x bull case, even as structural demand dynamics evolve.

The Scarcity Imperative: PlanB's S2F Model in a New Era

PlanB's S2F model, which posits that Bitcoin's price is inversely proportional to its stock-to-flow ratio (a measure of scarcity), has long been a cornerstone of bullish forecasts. Recent iterations of the model suggest Bitcoin could reach $532,000 by mid-2024 and $222,000 by 2026, with a 10-year horizon projecting a staggering $10.9 million per BTC according to analysis. While skeptics like André Dragosch of Bitwise argue that institutional demand now overshadows supply-side effects from halving events, the model's core premise-that scarcity drives value-remains unshaken.

The 2024 halving reduced miner rewards by 50%, tightening Bitcoin's supply and amplifying its scarcity premium. Exchange reserves are at their lowest since 2018, and over 60% of Bitcoin is now locked in long-term wallets, ETFs, or corporate treasuries, effectively thinning the active supply according to market data. This structural scarcity, combined with Bitcoin's fixed 21-million supply cap, creates a deflationary tailwind that no amount of institutional adoption can negate.

Structural Demand: Beyond Scarcity

Bitcoin's valuation in 2025–2026 is increasingly shaped by structural demand drivers that complement, rather than replace, scarcity-based narratives. Institutional adoption has surged, with spot Bitcoin ETFs attracting over $50 billion in inflows over the past year. These funds treat Bitcoin as a strategic asset, akin to gold, and their holdings act as a stabilizing force in the market.

Macroeconomic factors further reinforce this demand. As central banks near the end of their tightening cycles, the opportunity cost of holding non-yielding assets like Bitcoin declines, historically supporting its performance according to economic analysis. Meanwhile, Bitcoin's role as a hedge against inflation and currency devaluation-particularly in emerging markets-has expanded its utility beyond speculative trading.

Critiques and Counterarguments: Why Scarcity Still Matters

Critics argue that models like BAERM and the Power Law offer more moderate forecasts ($159,000 and $2.03 million, respectively) by incorporating variables such as market capitalization and adoption rates according to market analysis. However, these models often overlook the compounding effects of Bitcoin's scarcity. For instance, JPMorgan's $170,000 price target for 2026 assumes Bitcoin captures a gold-like share of the global store-of-value market-a scenario that inherently relies on its scarcity-driven appeal according to institutional forecasts.

Moreover, while institutional demand is undeniably robust, it is not immune to volatility. Regulatory uncertainties, such as the MSCI decision in January 2025, could trigger rapid corrections according to market outlook. Scarcity, by contrast, is a permanent feature of Bitcoin's design, providing a floor for its value even in bearish scenarios.

Investment Timing: A 2025–2026 Bull Case

The 2025–2026 cycle presents a unique confluence of factors favoring Bitcoin. Post-halving dynamics have already reduced miner selling pressure, and the maturation of ETF infrastructure has improved liquidity according to market analysis. If the five-wave rally identified in the Elliott Wave theory completes by late 2026, Bitcoin could test key support levels before resuming its upward trajectory according to technical analysis.

PlanB's S2F model, while imperfect, offers a probabilistic framework for understanding this trajectory. Even if Bitcoin's price lags below the model's projections, the interplay of scarcity and structural demand suggests a 10x bull case remains intact. For investors, the critical question is not whether Bitcoin will reach $10.9 million by 2035, but whether they position themselves to capture the compounding effects of its scarcity premium before institutional adoption alone drives the market.

Conclusion

Bitcoin's New Scarcity Narrative is not a relic of the past but a foundational pillar of its future. While alternative models and macroeconomic shifts add complexity to price predictions, the interplay of structural demand and inherent scarcity ensures that PlanB's S2F model retains its relevance. For investors with a long-term horizon, the 2025–2026 cycle offers a rare alignment of conditions to capitalize on Bitcoin's dual role as a scarce asset and a strategic store of value.