Initiation of Coverage: Bitcoin EUR (BTC_EUR)

Recommendation: Neutral (Long-Term Positional)

Price Target (12-month): €110,000

Current Price: €76,082

Key Data & Forecast Snapshot

• Current Price: €76,082
• Market Cap: €1,521,038,107,907
• 24h Volume: €33,117,678,961
• 24h Change: -1.09%
• Circulating Supply: 19,991,963 BTC

12-Month Forecasts

• Price Target: €110,000
• Implied Upside: 44.58% (Calculation: ((€110,000 / €76,082) – 1) * 100)
• Market Cap (Forecast): €2,199,115,930,000 (Calculation: 19,991,963 BTC * €110,000)

Investment Thesis

We initiate coverage on Bitcoin (BTC) with a Neutral (Long-Term Positional) recommendation and a 12-month price target of €110,000, implying a 44.58% upside from current levels. Our thesis is predicated on Bitcoin’s evolving role as a digital store of value, increasing institutional adoption, and the structural tailwinds from its predictable scarcity model (halving events) combined with growing regulatory clarity.

The cryptocurrency market, particularly Bitcoin, is entering a new phase characterized by sophisticated institutional participation. Recent legislative developments, such as the CLARITY Act, indicate a growing appetite for regulatory frameworks that facilitate institutional entry. This is evidenced by rising institutional demand, as highlighted by industry leaders like State Street Global Advisors (SSGA) and Pantera Capital, who anticipate significant capital flows into the asset class by 2026.

Bitcoin’s fundamental value proposition as “digital gold”—a scarce, decentralized, and censorship-resistant asset—is strengthening amidst global macroeconomic uncertainty, inflationary pressures, and geopolitical instability. While volatility remains a characteristic, the long-term trend suggests Bitcoin is maturing into a recognized alternative asset class. Ark Invest foresees Bitcoin and tokenization as primary drivers of the next growth phase in digital assets, further cementing its foundational role.

Our Neutral recommendation reflects a balanced view: we acknowledge significant upside potential driven by the factors above, but also recognize inherent market volatility and regulatory uncertainties that could temper short-term performance. We view Bitcoin as a strategic long-term allocation for diversified portfolios seeking exposure to digital scarcity and a hedge against traditional financial system risks.

Investment Positives

1. Increasing Institutional Adoption: Demand from institutions is accelerating, driven by product innovation (e.g., spot ETFs) and a clearer regulatory environment. Major financial players are actively exploring and allocating capital, moving Bitcoin from the periphery to mainstream investment portfolios (Source: SSGA, Ainvest).
2. Digital Scarcity & Halving Cycles: Bitcoin’s hard-capped supply of 21 million coins and programmed halving events (which reduce new supply issuance) create predictable scarcity. The most recent halving event (April 2024) historically precedes significant price appreciation, as demand increasingly outstrips new supply.
3. Evolving Regulatory Clarity: Global regulators are progressing toward more defined frameworks for digital assets. The CLARITY Act and other policy discussions in key markets (e.g., US) are reducing uncertainty, which is critical for broader institutional comfort and market maturation (Source: Ainvest, Streetwise Reports).
4. Macroeconomic Hedge & Store of Value: Bitcoin offers a potential hedge against inflation and currency debasement due to its decentralized nature and fixed supply. In an environment of unprecedented global debt and expansionary monetary policies, its appeal as a digital store of value continues to grow.
5. Network Effects & Security: Bitcoin’s robust network, powered by a global decentralized mining infrastructure, provides unparalleled security. The growing number of users, developers, and integrations (e.g., Lightning Network for scaling) enhances its utility and resilience over time.

Competitive/Peer Analysis

Bitcoin’s value proposition is often compared to traditional assets like Gold and leading cryptocurrencies like Ethereum. Each serves distinct roles within a diversified portfolio.

Bitcoin vs. Gold

• Similarities: Both are scarce, fungible, and perceived as stores of value, particularly during economic uncertainty. Neither yields a return in its native form.
• Bitcoin Advantages:
  • Digital Native: Highly portable, divisible, and resistant to seizure/censorship.
  • Absolute Scarcity: Fixed supply cap (21 million) is mathematically verifiable, unlike Gold’s estimated but finite supply.
  • Transparency: All transactions are recorded on a public ledger.
• Gold Advantages:
  • Historical Precedence: Thousands of years of acceptance as a store of value.
  • Physicality: Tangible asset, valued for industrial and jewelry uses.
  • Lower Volatility: Generally less volatile than Bitcoin.
• Conclusion: Bitcoin offers a technologically superior form of scarcity and portability compared to Gold, appealing to a digitally native generation and offering a hedge in a digital economy.

Bitcoin vs. Ethereum

• Bitcoin (BTC): Primarily optimized as a decentralized, immutable store of value and peer-to-peer electronic cash. Its scripting language is intentionally limited for security and stability.
• Ethereum (ETH): A smart contract platform enabling decentralized applications (dApps), DeFi, NFTs, and more complex programmable money. Often referred to as “digital oil” due to its utility.
• Bitcoin Advantages:
  • Purer Store of Value: Simpler, more focused design, enhancing its “digital gold” narrative.
  • Decentralization: Arguably more decentralized in mining and governance.
  • Security: Strongest and most robust blockchain network by hash power.
• Ethereum Advantages:
  • Programmability: Supports a vast ecosystem of dApps and innovative financial instruments.
  • Staking Yield: Holders can earn yield by staking ETH, providing an income component.
  • Innovation Hub: The primary platform for Web3 development.
• Conclusion: Bitcoin and Ethereum are complementary rather than directly competitive. Bitcoin establishes the base layer of digital scarcity, while Ethereum builds programmable utility on top. Both are critical to the growth of the broader digital asset ecosystem.

Estimates & Operating Assumptions

Our forward estimates for Bitcoin’s price and market capitalization are based on continued institutional adoption, supply shock dynamics post-halving, and a maturing regulatory landscape. We assume an annual circulating supply increase of approximately 1.64% due to block rewards.

3-Year Forward Estimates

• 2024 (Current Estimate)
  • Price (EoY): €76,082
  • Circulating Supply (EoY): 19,991,963 BTC
  • Market Cap (EoY): €1,521,038,107,907
• 2025 (Forecast)
  • Price (EoY): €120,000
  • Circulating Supply (EoY): 20,319,531 BTC (Calculation: 19,991,963 * (1 + 0.0164))
  • Market Cap (EoY): €2,438,343,720,000 (Calculation: 20,319,531 BTC * €120,000)
• 2026 (Forecast)
  • Price (EoY): €150,000
  • Circulating Supply (EoY): 20,652,656 BTC (Calculation: 20,319,531 * (1 + 0.0164))
  • Market Cap (EoY): €3,097,898,400,000 (Calculation: 20,652,656 BTC * €150,000)

Operating Assumptions

• Continued Institutional Inflows: We anticipate a steady increase in capital from asset managers, corporations, and sovereign wealth funds.
• Regulatory Harmonization: Further clarity and favorable regulation will unlock new investor pools and product offerings.
• Demand Outpacing Supply: Post-halving, the reduced new supply (approximately 1.64% annual inflation rate) will be increasingly insufficient to meet rising demand.
• Technological Resilience: The Bitcoin network maintains its security, stability, and continues to integrate scaling solutions (e.g., Lightning Network).
• Global Macro Backdrop: Persistent inflation, interest rate uncertainty, and geopolitical tensions drive continued interest in alternative assets like Bitcoin.

Valuation

Traditional equity valuation models are not directly applicable to Bitcoin due to its nature as a decentralized, non-revenue-generating asset. We rely on crypto-specific valuation methodologies and network-effect principles.

Network Value to Transactions (NVT) Ratio

• Concept: Similar to a P/E ratio for stocks, NVT compares Bitcoin’s market capitalization (Network Value) to the value of transactions processed on its blockchain (Transactions). A high NVT might suggest overvaluation relative to network usage, while a low NVT suggests undervaluation.
• Application: Given the current price action and increased institutional activity, NVT would need to be monitored closely for signs of overextension. However, the rise of off-chain transactions (e.g., Lightning Network) and hold-only investment strategies means NVT may understate true network utility.

Stock-to-Flow (S2F) Model

• Concept: The S2F model values Bitcoin based on its scarcity, specifically comparing its existing supply (stock) to its annual production (flow). Assets with high S2F ratios (meaning high stock relative to low new flow) are considered scarce and valuable, like gold and silver.
• Application: Bitcoin’s S2F ratio dramatically increases post-halving events, reflecting its programmed scarcity. This model suggests significant long-term price appreciation as Bitcoin’s scarcity intensifies over time, aligning with its “digital gold” narrative.

Network Effects (Metcalfe’s Law)

• Concept: Metcalfe’s Law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n^2).
• Application: As more users, developers, businesses, and institutions adopt Bitcoin, its network value grows exponentially. This includes the growing number of wallets, active addresses, and the increasing integration of Bitcoin into financial products and services. The increasing institutional involvement directly contributes to this network effect.

Our valuation reflects a blend of these conceptual models, emphasizing Bitcoin’s unparalleled digital scarcity, the accelerating network effects from institutional adoption, and its potential as a global macro hedge.

Key Risks

• Regulatory Uncertainty: Despite recent progress, inconsistent or overly restrictive regulatory frameworks across different jurisdictions could impede adoption and investment.
• Market Volatility: Bitcoin remains a highly volatile asset class, susceptible to rapid price swings driven by sentiment, macroeconomic news, and liquidity dynamics.
• Technological Risks: While robust, the Bitcoin network is not immune to potential protocol bugs, security vulnerabilities (e.g., 51% attacks, though increasingly difficult), or failures of associated infrastructure (exchanges, wallets).
• Competition: While Bitcoin’s position as a store of value is strong, competition from other cryptocurrencies or central bank digital currencies (CBDCs) could emerge, though their value propositions often differ.
• Macroeconomic Headwinds: A severe global economic downturn, tight monetary policy, or widespread deleveraging could reduce risk appetite for volatile assets like Bitcoin.
• Environmental Concerns: The energy consumption of Bitcoin mining remains a point of contention and could lead to regulatory pressure or ESG-driven divestments, though the industry is shifting towards renewable energy sources.

Appendix

All data and forecasts are based on publicly available information and internal estimates as of the report date. Live market data sourced from CoinGecko. Live market news sourced from Tavily Search (January 2026 dates). All figures are converted to EUR where applicable. Forecasts are forward-looking and subject to change based on market conditions and new information.

Disclaimer: This report is an AI-generated analysis based on provided market data and news. It should not be considered as financial advice. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions.

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