Initiation of Coverage: Bitcoin (BTC_EUR)

1. Key Data & Forecast Snapshot

Rating: Neutral

12-Month Price Target: €75,000

Upside: +34.68%

• Live Market Data (as of 2026-02-07, Source: CoinGecko)

  • Current Price: €55695
  • Market Cap: €1,113,924,162,133.15
  • 24h Volume: €137,099,658,373.21
  • 24h Change: -6.72%

• 12-Month Forecasts (AI-generated based on market analysis)

  • Price Target: €75,000
  • Market Cap Target: €1,500,000,000,000 (calculated as €75,000 / €55695 * €1,113,924,162,133.15)
  • 24h Volume: €150,000,000,000
  • 24h Change: Volatile, expected range ±3-5% daily (average)

2. Investment Thesis

We initiate coverage on Bitcoin (BTC_EUR) with a Neutral rating and a 12-month price target of €75,000. Bitcoin, the pioneer and dominant cryptocurrency by market capitalization, continues to solidify its position as a digital store of value. Despite recent significant price corrections, characterized by reports of “full capitulation mode” and a “crypto winter” (Business Insider, The Block), we believe the underlying long-term drivers for Bitcoin remain intact.

Our Neutral rating reflects a balanced view, acknowledging the current market headwinds and extreme volatility evident in the “losing half its value in three months” headline (HedgeCo). However, we also recognize the continued, albeit sometimes masked, institutional interest (The Block) and the fundamental scarcity embedded in Bitcoin’s protocol, particularly as the next halving event approaches. We anticipate a period of stabilization and gradual recovery as market participants digest the recent downturn and reassess long-term value propositions, aligning with Bitwise CIO’s perspective that the crypto winter is “nearer the end than the beginning.” JPMorgan’s revisiting of its Bitcoin forecast post-crash underscores the ongoing institutional engagement and re-evaluation (TheStreet).

Bitcoin’s value proposition as “digital gold” is increasingly relevant in an environment of potential currency debasement and geopolitical uncertainty. Its decentralized, censorship-resistant nature offers a unique hedge within a diversified portfolio. While short-term price action is highly speculative, we project a recovery toward €75,000 within the next 12 months, driven by renewed institutional inflows, sustained network adoption, and increasing clarity in regulatory frameworks globally.

3. Investment Positives

• Absolute Scarcity & Deflationary Supply Schedule

  Bitcoin’s hard cap of 21 million coins and programmed halving events (reducing new supply every ~4 years) create an inherently deflationary asset. This contrasts sharply with fiat currencies, positioning Bitcoin as a potential hedge against inflation and a superior store of value over the long term.

• Decentralization & Censorship Resistance

  Operating on a distributed ledger maintained by a global network of nodes, Bitcoin is not controlled by any single entity or government. This decentralization offers unparalleled censorship resistance and immutability, appealing to those seeking an alternative to traditional financial systems.

• Growing Institutional Adoption & Infrastructure

  Despite recent price declines, institutional interest in Bitcoin remains robust. The development of regulated investment vehicles, such as Bitcoin ETFs (e.g., iShares Bitcoin Trust ETF, as mentioned by The Motley Fool), sophisticated custody solutions, and corporate balance sheet allocations, continues to mature the ecosystem and broaden access for large-scale investors. This flow helps to legitimize the asset class, even during periods of “crypto winter” (The Block).

• Global Liquidity & Accessibility

  Bitcoin is traded 24/7 across thousands of exchanges worldwide, offering deep liquidity. Its permissionless nature allows anyone with an internet connection to access and transact, fostering global financial inclusion and reducing friction in cross-border payments.

• Network Security & Resilience

  The Bitcoin network is secured by the largest decentralized computing network globally (Proof-of-Work). Its long history of operation without a major security breach, coupled with its robust, open-source development community, demonstrates its resilience and trustworthiness.

4. Competitive/Peer Analysis

• Bitcoin vs. Gold

  • Similarities:

    • Store of Value: Both are widely perceived as stores of value, especially during economic uncertainty.
    • Scarcity: Both have finite supplies, although gold’s supply is unknown, while Bitcoin’s is mathematically capped.
    • Inflation Hedge: Both are often considered hedges against fiat currency debasement.

  • Differences:

    • Portability & Divisibility: Bitcoin is digital, easily transferable globally, and highly divisible into satoshis (€0.000000557 at current price). Gold is physical, heavy, and less divisible for small transactions.
    • Verification: Bitcoin’s authenticity is cryptographically verifiable on the blockchain. Gold requires physical inspection and assays.
    • Transaction Speed: Bitcoin transactions can settle globally in minutes (main chain) or seconds (Layer 2). Gold transactions are slower, often requiring intermediaries.
    • Decentralization: Bitcoin is fully decentralized. Gold’s ownership and custody often rely on centralized institutions.

  • Conclusion:

    Bitcoin is often termed “Digital Gold” due to its superior digital properties. While gold has centuries of proven history, Bitcoin offers a modern, technologically advanced alternative for wealth preservation.

• Bitcoin vs. Ethereum (ETH_EUR)

  • Similarities:

    • Decentralized: Both are decentralized, permissionless blockchain networks.
    • Open-Source: Both are supported by large developer communities.
    • Market Leaders: Both are the two largest cryptocurrencies by market capitalization.

  • Differences:

    • Primary Purpose: Bitcoin is primarily designed as a decentralized digital currency and store of value. Ethereum is a programmable blockchain platform enabling smart contracts and decentralized applications (dApps), often referred to as “world computer.”
    • Consensus Mechanism: Bitcoin uses Proof-of-Work (PoW). Ethereum transitioned from PoW to Proof-of-Stake (PoS) with “The Merge,” aiming for greater energy efficiency and scalability.
    • Supply: Bitcoin has a fixed supply of 21 million. Ethereum’s supply is not fixed but has a disinflationary mechanism post-Merge, with some ETH being burned per transaction.
    • Transaction Throughput: Ethereum’s network (especially with planned upgrades like sharding) aims for higher transaction throughput and lower fees than Bitcoin’s base layer, though Bitcoin’s Layer 2 solutions (e.g., Lightning Network) address its own scalability.

  • Conclusion:

    Bitcoin and Ethereum serve distinct, yet complementary, roles in the crypto ecosystem. Bitcoin is the digital value standard, while Ethereum is the foundational layer for decentralized finance (DeFi) and web3 innovation.

5. Estimates & Operating Assumptions (3-year forward looking, AI-generated)

Given Bitcoin’s nature as a decentralized network rather than a traditional company, our “operating assumptions” focus on key network health and adoption metrics. We project a gradual recovery and sustained growth in these areas, assuming the “crypto winter” eventually thaws and institutional adoption continues to mature.

• Average Daily Transaction Value (on-chain, EUR)

  • Current (est.): €7 billion
  • Year 1 Forecast (2027): €8.5 billion (+21%)
  • Year 2 Forecast (2028): €11 billion (+29%)
  • Year 3 Forecast (2029): €14 billion (+27%)

  Assumption: Recovery from current lows, increasing utility, and growing institutional settlement use cases.

• Number of Active Addresses (daily average)

  • Current (est.): ~1.1 million
  • Year 1 Forecast (2027): ~1.3 million (+18%)
  • Year 2 Forecast (2028): ~1.6 million (+23%)
  • Year 3 Forecast (2029): ~2.0 million (+25%)

  Assumption: Continued organic growth, wider retail and institutional adoption, and expansion into emerging markets.

• Network Hash Rate (EH/s)

  • Current (est.): ~550 EH/s
  • Year 1 Forecast (2027): ~650 EH/s (+18%)
  • Year 2 Forecast (2028): ~800 EH/s (+23%)
  • Year 3 Forecast (2029): ~1000 EH/s (+25%)

  Assumption: Continued investment in mining infrastructure, particularly from large-scale, often publicly traded, mining operations. Higher hash rate indicates stronger network security.

• Lightning Network Capacity (BTC)

  • Current (est.): ~5,500 BTC
  • Year 1 Forecast (2027): ~7,000 BTC (+27%)
  • Year 2 Forecast (2028): ~9,000 BTC (+29%)
  • Year 3 Forecast (2029): ~12,000 BTC (+33%)

  Assumption: Increased adoption of Layer 2 solutions for faster, cheaper micro-transactions, driving Bitcoin’s utility as a medium of exchange.

6. Valuation

Valuing Bitcoin requires a different approach than traditional equities, focusing on network-centric metrics rather than discounted cash flows. We utilize a blend of fundamental network analysis and scarcity models.

• Network Value to Transactions (NVT) Ratio

  The NVT ratio compares Bitcoin’s market capitalization to its daily on-chain transaction volume, akin to a P/E ratio for a traditional company. A lower NVT can suggest undervaluation relative to network activity.

  • Current Market Cap: €1,113,924,162,133
  • Estimated Daily On-Chain Transaction Volume: €7,000,000,000 (AI-generated estimate based on typical BTC on-chain volume)
  • Calculated NVT Ratio: €1,113,924,162,133 / €7,000,000,000 = 159.13

  Analysis: Historical NVT ratios vary widely, but typically range between 20-200. A ratio of ~159 suggests the network’s value is significantly higher than its daily settled value, which is common for an asset primarily viewed as a store of value rather than a high-frequency transactional currency. A low NVT suggests potential undervaluation relative to its historical trends, implying current price weakness may present an attractive entry point for long-term investors.

• Stock-to-Flow (S2F) Model

  The S2F model values Bitcoin based on its scarcity, comparing the existing supply (“stock”) to the new supply being mined annually (“flow”).

  • Current Circulating Supply: ~19,600,000 BTC
  • Annual New Supply (Flow): ~328,500 BTC (based on 6.25 BTC/block * 144 blocks/day * 365 days/year)
  • Calculated S2F Ratio: 19,600,000 / 328,500 = 59.67

  Analysis: The S2F model has historically correlated Bitcoin’s price with its scarcity. A higher S2F ratio implies greater scarcity and, theoretically, a higher value. Bitcoin’s current S2F ratio of nearly 60 positions it as one of the scarcest assets globally, comparable to gold. The model suggests significant long-term appreciation as scarcity increases post-halving events.

• Network Effects (Metcalfe’s Law)

  Bitcoin’s value is intrinsically linked to its network effects. Metcalfe’s Law suggests that the value of a network is proportional to the square of the number of connected users. As more users, developers, businesses, and institutions adopt Bitcoin, its utility and security grow exponentially.

  Analysis: Despite price downturns, the number of active addresses, network hash rate, and Lightning Network capacity continue to show long-term upward trends, indicating sustained growth in Bitcoin’s user base and utility. This continuous expansion of its network effects underpins its long-term value proposition beyond short-term speculative movements.

• Target Price Derivation

  Our 12-month price target of €75,000 implies a recovery driven by a moderation of the NVT ratio towards its historical mean, coupled with the anticipation of demand outstripping supply as the “crypto winter” recedes and institutional adoption continues. This target also reflects a conservative appreciation aligned with the S2F model’s long-term trajectory, without assuming immediate new all-time highs given current market sentiment.

7. Key Risks

• Regulatory Uncertainty

  The evolving global regulatory landscape poses a significant risk. Potential bans, restrictive tax policies, or unfavorable classifications (e.g., security vs. commodity) could severely impact Bitcoin’s price and adoption. Differing regulations across jurisdictions create complexity and fragmentation.

• Technological Obsolescence & Competition

  While Bitcoin is a pioneer, continuous innovation in the blockchain space could lead to the emergence of superior technologies with better scalability, privacy, or energy efficiency. Though Bitcoin’s first-mover advantage and network effects are strong, competition from other cryptocurrencies or even central bank digital currencies (CBDCs) remains a long-term risk.

• Security Risks & Network Attacks

  Despite its robust design, Bitcoin is not immune to potential security vulnerabilities. Risks include 51% attacks (though increasingly improbable for Bitcoin), software bugs, or breaches of centralized exchanges and wallets holding Bitcoin. Such events could erode confidence and trigger significant price drops.

• Market Volatility & Liquidity Risk

  Bitcoin is highly volatile, prone to rapid and substantial price swings, as evidenced by the recent “half its value in three months” decline (HedgeCo). This volatility is driven by speculative trading, macroeconomic factors, and news events. While highly liquid, extreme price movements can lead to sudden liquidity gaps in specific markets.

• Environmental Concerns

  Bitcoin’s Proof-of-Work (PoW) consensus mechanism consumes significant energy, leading to environmental criticism. Increasing regulatory scrutiny and public pressure regarding energy consumption could lead to restrictions on mining operations or negatively impact public perception, affecting adoption and price.

• Macroeconomic Headwinds

  As Bitcoin gains broader acceptance, it becomes more susceptible to global macroeconomic factors such as interest rate hikes, inflation, economic recessions, and geopolitical instability. These factors can influence investor risk appetite and capital flows into speculative assets.

8. Appendix

• Disclaimer

  This report is for informational purposes only and does not constitute financial advice. The opinions and estimates expressed herein are subject to change without notice. Investing in cryptocurrencies carries a high level of risk, and investors may lose all of their capital. Past performance is not indicative of future results.

• Analyst Certification

  I, the undersigned analyst, certify that the views expressed in this research report accurately reflect my personal views about the subject security(ies) and issuer(s). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view(s) expressed in this research report.

  This report has been generated by an Artificial Intelligence model. While every effort has been made to ensure accuracy and adherence to financial research standards, all forecasts and estimations are model-generated and should be treated as such.

• Data Sources

  • CoinGecko (Live Market Data)
  • Tavily Search (Live Market News)
  • Business Insider
  • HedgeCo.net
  • The Motley Fool
  • The Block
  • TheStreet
  • Glassnode (general reference for on-chain metrics methodologies)
  • AI-generated estimates based on prevailing market sentiment and long-term trends.

Important Note / Wichtiger Hinweis:

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