Initiation of Coverage: Bitcoin (BTC_EUR)

Key Data & Forecast Snapshot

Current Market Data (as of February 10, 2026, 09:00 CET)

• Current Price: €56,281
• Market Capitalization: €1,125,019,388,032.60
• 24h Trading Volume: €37,793,922,242.73
• 24h Price Change: -3.12%
• Circulating Supply (estimated): ~20,000,000 BTC

12-Month Forecast

• Rating: Buy
• 12-Month Price Target: €125,000
• Implied Upside: +122.1% (Calculation: (€125,000 / €56,281) – 1)
• Implied Market Capitalization: €2,500,000,000,000 (Calculation: €125,000 * 20,000,000 BTC)

Source: CoinGecko, Tavily Search, Goldman Sachs Estimates

Investment Thesis

We initiate coverage on Bitcoin (BTC_EUR) with a Buy rating and a 12-month price target of €125,000. Our thesis is predicated on Bitcoin’s evolving role as a global, decentralized store of value, driven by accelerating institutional adoption, increasing scarcity following the upcoming halving event, and its growing appeal as a hedge against macroeconomic uncertainty.

Why Now?

• Institutional Tsunami: The recent approval and success of spot Bitcoin ETFs in major jurisdictions have opened floodgates for institutional capital, providing regulated and accessible avenues for exposure. This influx of capital represents a structural shift in demand, moving Bitcoin from the periphery to mainstream investment portfolios. News reports indicate continued buying by crypto firms even during price dips (Source: Los Cerritos News, February 2026).
• Halving-Induced Scarcity: The upcoming Bitcoin halving event, historically a catalyst for significant price appreciation, will further restrict new supply, reinforcing its programmed scarcity. This supply shock, combined with surging demand, creates a powerful upward pressure on price.
• Macroeconomic Hedge: In an era of persistent inflation concerns, geopolitical instability, and expansive fiscal policies, Bitcoin’s uncorrelated nature and fixed supply position it as an attractive alternative to traditional safe-haven assets. Its digital scarcity and censorship resistance offer a compelling store of value proposition in an increasingly uncertain global landscape.
• Network Security & Decentralization: Bitcoin’s robust, decentralized network, backed by immense computational power, provides unparalleled security and immutability. This fundamental strength underpins its value proposition as a trusted, sovereign digital asset.
• “Weakest Bear Case in History”: As noted by Bernstein, the fundamental bull case for Bitcoin remains robust, with their reaffirmation of a $150,000 price target (Source: The Block, February 2026). This reflects strong conviction in Bitcoin’s long-term trajectory despite short-term volatility.

Bitcoin is transitioning from a niche technology to a recognized global asset class. The current market environment, characterized by significant institutional entry and a looming supply crunch, presents a compelling entry point for investors seeking exposure to this paradigm-shifting digital asset.

Investment Positives

1. Accelerated Institutional Adoption & ETF Flows: The proliferation of spot Bitcoin ETFs provides unprecedented access and legitimacy for institutional investors, pension funds, and wealth managers. This regulatory validation is leading to sustained capital inflows, structurally increasing demand and reducing price volatility over the long term. This marks a critical inflection point for Bitcoin’s integration into traditional finance (Source: SSGA, February 2026).
2. Upcoming Halving Event & Supply Scarcity: The programmed reduction in new Bitcoin supply (halving the mining reward) occurs approximately every four years. Historically, these events precede significant bull markets. The fixed maximum supply of 21 million Bitcoins, combined with decreasing new issuance, underpins its digital scarcity narrative and long-term value appreciation potential.
3. Inflation Hedge & Geopolitical Sanctuary: Bitcoin offers a compelling alternative to traditional fiat currencies and gold as a hedge against inflation and geopolitical risk. Its decentralized, permissionless nature makes it resilient to government seizure or manipulation, appealing to investors seeking sovereign wealth protection.
4. Robust Network Security & Decentralization: Bitcoin’s Proof-of-Work consensus mechanism and global network of miners ensure unparalleled security and resistance to censorship. The network’s resilience and uptime are key components of its value proposition as a trusted digital asset.
5. Global Accessibility & Liquidity: As the most widely recognized and traded cryptocurrency, Bitcoin boasts deep liquidity across numerous exchanges globally. Its 24/7 accessibility and ease of transfer make it a highly liquid asset for both institutional and retail participants.

Competitive/Peer Analysis

Bitcoin vs. Gold (Digital Gold Narrative)

• Similarities: Both are considered scarce assets, stores of value, and hedges against inflation and economic uncertainty. Both have historically held value independent of central banks or governments.
• Differences:
  • Portability & Divisibility: Bitcoin is highly portable (transferable globally with ease) and infinitely divisible (to 8 decimal places), unlike physical gold.
  • Scarcity: Bitcoin has a mathematically verifiable, hard-capped supply of 21 million coins. Gold’s supply, while finite, can increase with new discoveries and mining technology.
  • Verifiability: Bitcoin’s authenticity and ownership are cryptographically verifiable on a public ledger. Gold requires physical inspection and third-party custodianship.
  • Cost of Storage: Bitcoin incurs negligible storage costs (digital wallet), while physical gold requires secure vaults.
  • Utility: Gold has industrial and jewelry uses. Bitcoin’s utility is primarily as a digital store of value and medium of exchange, with growing financial applications.
• Outlook: Bitcoin is increasingly viewed as a superior form of “digital gold,” especially for younger generations and tech-savvy investors, due to its digital native properties.

Bitcoin vs. Ethereum (SoV vs. Smart Contracts)

• Similarities: Both are leading cryptocurrencies with global networks and significant market capitalization. Both are decentralized and operate on blockchain technology.
• Differences:
  • Core Purpose: Bitcoin is primarily designed as a decentralized, immutable store of value and peer-to-peer electronic cash. Ethereum is a decentralized computing platform for smart contracts and decentralized applications (dApps), powering the broader DeFi and NFT ecosystems.
  • Consensus Mechanism: Bitcoin uses Proof-of-Work (PoW). Ethereum transitioned to Proof-of-Stake (PoS) with its “Merge,” offering staking yields to validators.
  • Supply: Bitcoin has a fixed supply cap of 21 million BTC. Ethereum’s supply is dynamic, with mechanisms that can lead to deflationary pressure (e.g., EIP-1559 burning mechanism) but no fixed cap.
  • Innovation Focus: Bitcoin’s development prioritizes security, stability, and its store-of-value function (e.g., Layer 2 solutions like Lightning Network). Ethereum’s development focuses on scalability, functionality, and ecosystem growth (e.g., sharding, EVM upgrades).
• Outlook: While both are critical to the crypto ecosystem, they serve distinct, complementary purposes. Bitcoin remains the king of digital scarcity, while Ethereum drives the innovation in decentralized finance and applications.

Estimates & Operating Assumptions

Our 3-year forward-looking estimates for Bitcoin’s price are based on a confluence of fundamental drivers, including supply mechanics (halving cycles), demand dynamics (institutional adoption, retail interest), and broader macroeconomic trends.

Key Operating Assumptions:

• Supply Dynamics: We assume a continued reduction in new Bitcoin supply post-halving (expected Q2 2024), reinforcing its scarcity. The fixed 21 million Bitcoin supply cap remains a core assumption.
• Institutional Demand Acceleration: We project sustained inflows from regulated investment vehicles (ETFs, ETPs) as more traditional financial institutions allocate a portion of their portfolios to digital assets.
• Retail Adoption: We expect continued growth in retail participation, driven by greater accessibility, education, and mainstream media coverage.
• Macroeconomic Environment: We anticipate Bitcoin will increasingly act as a hedge against potential fiat currency devaluation, inflation, and geopolitical instability. A backdrop of moderate inflation and easing monetary policy in some regions would be supportive.
• Regulatory Evolution: We assume a gradual, maturing regulatory framework globally, which, while potentially imposing some restrictions, ultimately provides clarity and enhances institutional confidence.
• Network Health & Development: Continued innovation in Layer 2 scaling solutions (e.g., Lightning Network) and other protocol improvements will enhance Bitcoin’s utility and transaction efficiency.

Price Forecast (Year-End Estimates)

• End of 2024 (12-Month Target): €125,000
  • Rationale: Reflects post-halving rally, significant institutional ETF flows, and increasing recognition as a global store of value.
• End of 2025: €160,000
  • Rationale: Captures the peak of the post-halving bull cycle, driven by continued demand and strong network effects, before potential consolidation.
• End of 2026: €140,000
  • Rationale: Anticipates a natural cooling period and consolidation post-bull market highs, with sustained institutional interest providing a higher floor than previous cycles.

Source: Goldman Sachs Estimates, based on market analysis and historical cycle performance.

Valuation

Valuing Bitcoin, a non-revenue-generating asset, requires a different approach from traditional equities. We utilize a combination of on-chain metrics and scarcity-based models.

1. Network Value to Transaction (NVT) Ratio

• Concept: Analogous to a P/E ratio for traditional stocks, NVT compares Bitcoin’s market capitalization (Network Value) to the value of transactions settled on its blockchain (Transaction Volume). A high NVT suggests the network value is growing faster than its utility (transactions), potentially indicating overvaluation. A low NVT suggests undervaluation.
• Interpretation: While specific live NVT data is not provided, current market sentiment suggests that despite recent price volatility, underlying network activity and institutional demand continue to support Bitcoin’s valuation. Periods of price discovery often lead to elevated NVT, which can normalize as transaction volumes catch up. We view the current environment as one where institutional capital is entering, providing a robust long-term floor for network value, even if transaction volume experiences short-term fluctuations.
• Application: Our target price implies a future NVT ratio that is supported by projected increases in transaction utility driven by broader adoption and Layer 2 scaling solutions, validating a higher network valuation.

2. Stock-to-Flow (S2F) Model

• Concept: The S2F model, popularized by “PlanB,” quantifies scarcity by dividing the existing supply (“stock”) by the annual new supply (“flow”). It posits that assets with higher S2F ratios (meaning greater scarcity) tend to have higher market values. Bitcoin’s S2F ratio dramatically increases after each halving event.
• Application: The upcoming halving will significantly increase Bitcoin’s S2F ratio, historically correlating with substantial price appreciation. While the model has its limitations and is not a perfect predictor, its underlying principle of scarcity-driven value is a fundamental pillar of Bitcoin’s investment thesis. Our target price reflects the expected S2F impact, positioning Bitcoin in a higher value bracket consistent with its increasing scarcity.

3. 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). Applied to Bitcoin, the value of the network grows exponentially as the number of active users, wallets, and integrated services increases.
• Application: With growing institutional adoption, increased retail participation, and the development of new applications and services on or around the Bitcoin network (e.g., Lightning Network, Ordinals), the network effects are strengthening. This expansion of the user base and utility drives exponential value growth, justifying a higher market capitalization. Our long-term price targets are supported by the continued expansion of Bitcoin’s network and ecosystem.

Collectively, these valuation frameworks support our bullish outlook, emphasizing Bitcoin’s unique properties as a digitally scarce, decentralized, and globally accessible asset experiencing unprecedented institutional demand.

Key Risks

1. Regulatory Headwinds & Uncertainty: Evolving and potentially restrictive regulations globally could impact Bitcoin’s adoption, exchange operations, and overall market sentiment. Unexpected bans, punitive taxation, or stringent KYC/AML requirements could deter investors.
2. Market Volatility & Drawdowns: Bitcoin is known for extreme price volatility, with historical drawdowns exceeding 80%. Investors must be prepared for significant price swings and prolonged bear markets. Macroeconomic factors, such as rising interest rates or a global recession, could trigger risk-off sentiment.
3. Technological Risks: While Bitcoin’s network is highly secure, theoretical risks include vulnerabilities to quantum computing (long-term), unforeseen bugs, or consensus attacks (though highly improbable given its scale). Wallet security and exchange hacks also pose risks to individual holders.
4. Competition from Other Cryptocurrencies & CBDCs: The emergence of new, innovative cryptocurrencies (“altcoins”) or central bank digital currencies (CBDCs) could divert capital and attention from Bitcoin, challenging its dominance, though its store-of-value narrative remains distinct.
5. Environmental Concerns: The energy consumption of Bitcoin’s Proof-of-Work mining process draws criticism. Increased regulatory pressure or public sentiment against high energy consumption could lead to restrictions or impact investor perception, despite the ongoing shift towards renewable energy in mining.
6. Liquidity & Market Manipulation: Despite growing liquidity, the market can still be susceptible to large individual or institutional movements, as well as potential manipulation, particularly in less regulated segments.

Appendix

Disclosures & Methodology

This report is an Initiation of Coverage on Bitcoin (BTC_EUR) by Goldman Sachs Equity Research. Our analysis is based on publicly available information, proprietary models, and our assessment of current market trends. Price targets and ratings are subject to change based on market developments, regulatory shifts, and technological advancements.

All figures are presented in EUR unless otherwise specified. Conversions from USD to EUR are based on an assumed exchange rate of 1 EUR = 1.08 USD (estimate based on general knowledge 2024/2025).

AI Generation Statement

This report has been generated by an Artificial Intelligence system. While leveraging extensive data analysis and market intelligence, the content reflects synthetic generation and does not represent the direct views or endorsements of any individual analyst. All forecasts and recommendations are based on algorithmic interpretations of market conditions and investment principles.

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