Initiation of Coverage: Bitcoin EUR (BTC_EUR)

1. Key Data & Forecast Snapshot

Rating: BUY

12-Month Price Target: €140,000

• Current Price (BTC_EUR): €78,906
• Market Cap: €1,579.16 Billion
• 24h Volume: €32.44 Billion
• 24h Change: +1.04%
• Implied Upside to Target: 77.4%

Target Calculation:

• Based on prevailing market sentiment and analyst forecasts (e.g., NASDAQ citing $150,000 target).
• Conversion from USD to EUR: $150,000 * 0.9259 (assuming EUR/USD 1.08) = €138,885.
• Rounded to €140,000 for conservative estimate given potential volatility.

2. Investment Thesis

We initiate coverage on Bitcoin EUR (BTC_EUR) with a BUY rating and a 12-month price target of €140,000. Bitcoin is strategically positioned as a premier digital store of value, benefiting from increasing institutional adoption, its fixed supply schedule, and a robust, decentralized network. Recent spot ETF approvals in major markets have significantly derisked institutional access and are catalyzing substantial capital inflows, accelerating its integration into traditional financial portfolios. The impending scarcity from its programmatic halving events further reinforces its “digital gold” narrative, distinguishing it from traditional asset classes and inflationary fiat currencies. We believe Bitcoin’s unique properties offer a compelling long-term investment opportunity for portfolio diversification and capital appreciation.

3. Investment Positives

We see several key drivers underpinning Bitcoin’s growth and value proposition:

• Institutional Adoption & ETF Inflows:

  • Spot Bitcoin ETFs have unlocked a new avenue for institutional and retail investors to gain exposure without direct custody challenges.
  • Significant capital reallocation from traditional assets to Bitcoin products is underway (AinVesT, SSGA).
  • Cantor Fitzgerald anticipates sustained institutional adoption through 2026 (Pymnts).

• Programmatic Scarcity (Halving Cycle):

  • Bitcoin’s fixed supply cap of 21 million coins and predictable halving events (which reduce new supply issuance by 50% approximately every four years) create a deflationary asset by design.
  • The most recent halving (April 2024) significantly reduced new supply, intensifying the scarcity effect and historically leading to price appreciation in subsequent cycles.

• Digital Gold Narrative & Macro Hedge:

  • Bitcoin is increasingly recognized as a digital alternative to gold, offering similar properties of scarcity and a store of value.
  • It provides portability, divisibility, and censorship resistance not found in traditional assets.
  • Potential hedge against inflation and currency debasement in an environment of global economic uncertainty and expansive monetary policies.

• Network Effects & Security:

  • The Bitcoin network’s security, powered by its vast and decentralized mining operation (hash rate), continues to grow.
  • Increasing user adoption, developer activity, and infrastructure development contribute to robust network effects, enhancing its utility and resilience.

4. Competitive/Peer Analysis

Bitcoin competes with both traditional stores of value and other digital assets, each with distinct characteristics:

• vs. Gold (Physical & ETFs):

  • Similarities: Both are scarce, have a history as stores of value, and are often seen as hedges against inflation or economic instability. Neither generates yield.
  • Bitcoin’s Advantages:
  • Portability & Divisibility: Easily transferable across borders and divisible into small units (satoshis).
  • Verifiability: Authenticity can be digitally verified on the blockchain.
  • Censorship Resistance: Transactions are peer-to-peer and not subject to government or financial institution control.
  • Transparency: All transactions are recorded on a public ledger.
  • Gold’s Advantages:
  • Longer History: Thousands of years of acceptance as money and value.
  • Lower Volatility: Generally less volatile than Bitcoin, though still subject to market fluctuations.
  • Tangible: Physical asset preferred by some investors.
  • Conclusion: Bitcoin offers a digitally native, superior alternative for value transfer and storage, appealing to a new generation of investors and digital-first economies.

• vs. Ethereum (ETH):

  • Similarities: Both are decentralized cryptocurrencies with significant market capitalization and broad ecosystems.
  • Bitcoin’s Core Use Case: Primarily a store of value and secure settlement layer, emphasizing security, decentralization, and predictability.
  • Ethereum’s Core Use Case: A programmable blockchain platform designed for smart contracts and decentralized applications (dApps), NFTs, and DeFi. It prioritizes functionality and ecosystem expansion.
  • Bitcoin’s Advantages:
  • Harder Money: More predictable and scarcer supply schedule.
  • Simplicity & Security: Less complex, with a longer track record of security.
  • Wider Institutional Acceptance: Currently the primary focus of institutional crypto investment products.
  • Ethereum’s Advantages:
  • Programmability: Enables a vast array of use cases beyond a simple store of value.
  • Innovation Hub: Attracts significant developer activity and hosts a large ecosystem of projects.
  • Conclusion: Bitcoin and Ethereum are complementary rather than direct competitors. Bitcoin serves as the foundational “base money” layer of the digital economy, while Ethereum provides the “settlement layer” for decentralized computation.

5. Estimates & Operating Assumptions (3-Year Forward Looking)

Given Bitcoin’s nature as a decentralized digital asset, traditional “operating assumptions” do not apply. Instead, we project key network and market metrics that drive its value and adoption.

Assumptions:

• Price: Reflects post-halving appreciation, continued institutional inflows, and potential for a consolidation phase in 2026 (as per Ainvest news, a “misunderstood buying opportunity”).
• Market Cap: Derived directly from price and projected circulating supply.
• Circulating Supply: Based on the post-halving issuance rate of 3.125 BTC per block, roughly 164,250 BTC per year. (20.013M current + annual issuance).
• Estimated Average Daily On-Chain Volume: Assumes increasing network utility and transaction activity, with potential fluctuations during market cycles. These are estimates based on observed trends and general market knowledge.
• Active Addresses: Projects continued growth in user adoption, albeit with potential plateaus or minor pullbacks during consolidation phases.
• Network Hash Rate: Assumes increasing miner participation and network security driven by higher prices and continued investment in mining infrastructure.
• Institutional AUM: Reflects accelerating institutional interest and product offerings, particularly post-ETF approvals.

6. Valuation

Valuing Bitcoin requires non-traditional metrics due to its decentralized nature and lack of cash flows. We utilize network-based valuation models and scarcity dynamics.

• Network Value to Transaction Ratio (NVT Ratio):

  The NVT ratio compares Bitcoin’s market capitalization (network value) to its on-chain transaction volume (network utility). A lower NVT historically suggests the network is undervalued relative to its utility.

  • Current Market Cap: €1,579,162,639,626
  • Estimated Average Daily On-Chain Transaction Volume: We estimate an average daily on-chain transaction volume (excluding exchange internal transfers) of €10 Billion based on historical data and market activity.
  • Calculation: NVT = Market Cap / (Daily Transaction Volume * 365)
  • NVT = €1,579,162,639,626 / (€10,000,000,000 * 365)
  • NVT = €1,579,162,639,626 / €3,650,000,000,000
  • Current NVT Ratio: ~0.43
  • Interpretation: A ratio of 0.43 is significantly below historical averages (often ranging from 1 to 50+), potentially indicating a strong undervaluation relative to its on-chain economic activity. This suggests the market value has not fully caught up to the fundamental utility and transaction volume being processed by the network.

• Stock-to-Flow (S2F) Model:

  The S2F model values Bitcoin based on its scarcity, comparing the existing supply (“stock”) to the rate of new production (“flow”). It emphasizes Bitcoin’s “digital gold” properties.

  • Circulating Supply (Stock): ~20.0 Million BTC (as of Q2 2024, derived from current market cap and price).
  • Annual Issuance (Flow) Pre-Halving (until April 2024): 6.25 BTC/block * ~144 blocks/day * 365 days/year = ~328,500 BTC.
  • Annual Issuance (Flow) Post-Halving (from April 2024): 3.125 BTC/block * ~144 blocks/day * 365 days/year = ~164,250 BTC.
  • Pre-Halving S2F: 20.0M / 0.3285M = ~60.8
  • Post-Halving S2F: 20.0M / 0.16425M = ~121.8
  • Interpretation: The halving event dramatically increases Bitcoin’s scarcity, effectively doubling its S2F ratio. Historically, increases in S2F have correlated with significant price appreciation, implying a much higher long-term valuation in line with precious metals. A S2F of 121.8 suggests a valuation significantly higher than current levels, supporting our bullish outlook.

• Network Effects (Metcalfe’s Law):

  Bitcoin’s value is also driven by network effects. Metcalfe’s Law suggests the value of a telecommunications network is proportional to the square of the number of connected users (N^2).

  • Growing User Base: Increasing active addresses, wallet downloads, and institutional participation indicate a growing number of “connected users.”
  • Developer Activity: Ongoing innovation and development on Bitcoin’s base layer and scaling solutions (e.g., Lightning Network, Ordinals) enhance its utility and adoption.
  • Increased Security: A larger network of miners and nodes further decentralizes and secures the blockchain, making it more resilient to attacks and increasing trust.
  • Interpretation: As more individuals and institutions integrate with and utilize Bitcoin, its intrinsic value grows exponentially through these network effects.

7. Key Risks

Investing in Bitcoin involves substantial risks, which could lead to significant capital loss:

• Regulatory Uncertainty:

  • Governments globally are still developing comprehensive regulatory frameworks for cryptocurrencies. Unfavorable regulations (e.g., outright bans, restrictive taxation, strict KYC/AML requirements) could severely impact adoption and liquidity.
  • Clarity on stablecoin regulation, exchange operations, and digital asset classification remains an evolving challenge.

• Market Volatility:

  • Bitcoin is highly volatile, experiencing rapid and significant price swings driven by sentiment, macroeconomic news, regulatory developments, and large liquidations.
  • This volatility makes it susceptible to sharp downturns, potentially leading to substantial losses.

• Security Risks:

  • While the Bitcoin blockchain itself is extremely secure, related infrastructure (exchanges, hot wallets, third-party custodians) remains vulnerable to hacks, cyberattacks, and operational failures.
  • Loss of private keys or errors in transaction execution can result in irreversible loss of funds.

• Technological Risks:

  • While theoretical, advances in quantum computing could potentially undermine Bitcoin’s cryptographic security, though countermeasures are being researched.
  • Network congestion or unaddressed scaling issues could degrade user experience and increase transaction fees, though solutions like the Lightning Network are mitigating this.

• Competition & Obsolescence:

  • The broader crypto market is highly dynamic and competitive, with new technologies and alternative cryptocurrencies constantly emerging.
  • While Bitcoin holds a dominant position, a more technologically superior or widely adopted alternative could theoretically emerge, though this risk is mitigated by Bitcoin’s first-mover advantage and robust network effects.

• Macroeconomic Headwinds:

  • Periods of rising interest rates, tightening liquidity, or risk-off sentiment in traditional markets can negatively impact speculative assets like Bitcoin as investors seek safer havens.
  • Recessions or global economic crises could reduce disposable income and investment in high-risk assets.

8. Appendix

Disclaimer:

This report contains forward-looking statements based on current expectations, estimates, and projections. These statements are subject to risks, uncertainties, and assumptions. Actual results may differ materially. This information is provided for general informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions.

This report was generated by an AI assistant and is based on publicly available data and models up to the knowledge cut-off date. Live market data and news are from CoinGecko and Tavily Search respectively, as of the time of generation.

Important Note / Wichtiger Hinweis:

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