Initiation of Coverage: Bitcoin EUR (BTC_EUR)

1. Key Data & Forecast Snapshot

Recommendation: BUY

12-Month Price Target: €105,000

Implied Upside: 34.89%

• Current Price: €77837
• Market Cap: €1,554,745,322,549
• 24h Volume: €11,819,803,093
• 24h Change: +0.21%
• Circulating Supply: ~19,974,124 BTC (Calculated: Market Cap / Current Price)

12-Month Forecasts

• 12-Month Price Target: €105,000
  • Assumption: Continued institutional adoption, favorable regulatory developments (e.g., spot ETFs), post-halving supply shock dynamics, and growing macro uncertainty driving demand for decentralized assets. Forecast aligns with bullish analyst projections for early 2026 (source: Tavily news).
• Forecast Circulating Supply (12m): 20,138,374 BTC
  • Calculation: Current Supply (19,974,124 BTC) + New Supply (450 BTC/day * 365 days = 164,250 BTC). (Estimate based on post-April 2024 halving block reward of 3.125 BTC per block).
• Forecast Market Cap (12m): €2,114,529,270,000
  • Calculation: 12-Month Price Target (€105,000) * Forecast Circulating Supply (20,138,374 BTC).

2. Investment Thesis

We initiate coverage on Bitcoin EUR (BTC_EUR) with a BUY recommendation and a 12-month price target of €105,000. Our thesis is predicated on Bitcoin’s evolving status as a global macro asset, driven by accelerating institutional adoption, an increasingly scarce supply schedule (post-halving), and its role as a decentralized, immutable store of value amidst ongoing geopolitical and macroeconomic uncertainties. The narrative of “digital gold” is solidifying, attracting capital from sophisticated investors seeking portfolio diversification and inflation hedging capabilities. Growing network effects, continuous infrastructure development, and increasing mainstream acceptance further underpin our bullish outlook.

3. Investment Positives

1. Accelerating Institutional Adoption: The approval and success of spot Bitcoin ETFs in major markets, alongside increasing allocations from financial advisors and institutional entities (source: ETFDB, SSGA), signify a critical inflection point. This validates Bitcoin as a legitimate asset class, opening new avenues for capital inflow and enhancing liquidity.
2. Supply Scarcity & Halving Cycles: Bitcoin’s hard-capped supply of 21 million units and its programmatic halving events create unparalleled scarcity. The recent halving (April 2024) reduced new supply by 50%, historically preceding significant price appreciation due to increased demand meeting reduced issuance. Our forecast incorporates this supply-side shock.
3. “Digital Gold” Narrative Strengthening: Amidst global inflation concerns, currency debasement, and geopolitical instability, Bitcoin’s characteristics—decentralization, censorship resistance, and finite supply—position it as a robust alternative and complement to traditional safe-haven assets like gold.
4. Robust Network Effects & Security: Bitcoin’s distributed network, largest by hash rate among cryptocurrencies, ensures unparalleled security and resilience. The continuous growth in active addresses, developer activity, and payment integrations reinforces its utility and long-term viability, creating a powerful network effect (Metcalfe’s Law).
5. Maturing Regulatory Landscape: While still evolving, the regulatory environment is gradually maturing. Clearer guidelines and frameworks are emerging globally, fostering investor confidence and facilitating broader mainstream integration. The institutional interest cited in recent news suggests a forward-looking view on this regulatory path.

4. Competitive/Peer Analysis

Bitcoin vs. Gold

• Store of Value: Both assets serve as stores of value. Gold has a millennia-long track record; Bitcoin is a nascent digital alternative.
  • Advantages for Bitcoin: Portability, divisibility, verifiable scarcity (fixed supply), censorship resistance, and lower storage/transaction costs.
  • Advantages for Gold: Historical precedent, lower volatility, tangible asset, universal acceptance (less regulatory risk historically).
• Inflation Hedge: Both are considered inflation hedges. Bitcoin’s performance during periods of monetary expansion has shown strong correlation with inflation fears, potentially offering a more dynamic hedge than gold.
• Market Dynamics: Bitcoin is highly sensitive to technological innovation and regulatory news, whereas gold is more tied to macro interest rate policy and geopolitical events. We believe Bitcoin offers superior long-term growth potential due to its digital nature and accelerating adoption curve.

Bitcoin vs. Ethereum

• Core Utility: Bitcoin is primarily a decentralized digital currency and store of value. Ethereum is a smart contract platform, forming the backbone of a vast decentralized application (dApp) ecosystem, including DeFi, NFTs, and Web3.
  • Bitcoin Focus: Scarcity, immutability, ultimate settlement layer.
  • Ethereum Focus: Programmability, utility, platform for innovation.
• Monetary Policy: Bitcoin has a predictable, disinflationary supply schedule (halving). Ethereum’s supply schedule is deflationary post-Merge (EIP-1559 and staking rewards), but less predictable than Bitcoin’s.
• Investment Profile: Bitcoin is often viewed as a “blue-chip” crypto asset for broader macroeconomic exposure. Ethereum, while also large-cap, offers exposure to the growth of the broader decentralized application layer, implying potentially higher risk/reward. Institutions are beginning to use “Bitcoin options playbook on altcoins” (source: AOL news), indicating Bitcoin’s foundational role.

5. Estimates & Operating Assumptions (3-year forward)

Our forecasts for Bitcoin reflect continued growth in adoption, market capitalization, and network utility. These estimates are subject to the inherent volatility and evolving nature of the cryptocurrency market.

Note: Circulating supply assumes consistent block issuance of 450 BTC/day post-April 2024 halving. Average Daily On-chain Transaction Volume is an estimate for value settled on the Bitcoin blockchain, distinct from trading volume. Hash Rate growth reflects ongoing miner investment and network security.

6. Valuation

Valuing Bitcoin requires a combination of fundamental analysis, network-centric models, and comparison to traditional asset classes. Given its unique characteristics, traditional equity valuation models (e.g., DCF) are less applicable.

Network Value to Transactions (NVT) Ratio

• The NVT ratio, akin to a P/E ratio for traditional equities, compares Bitcoin’s market capitalization (Network Value) to its on-chain transaction volume (Transactions). A rising NVT can indicate that the network value is growing faster than its utility for transactions, potentially suggesting overvaluation, and vice-versa.
• Current Calculation:
  • Network Value (Market Cap): €1,554,745,322,549
  • Estimated Annualized On-chain Transaction Volume: €2,737,500,000,000 (Based on estimated €7.5B daily on-chain volume * 365 days)
  • Estimated NVT Ratio: ~0.57
• Analysis: While the current ratio appears low, the NVT is most effective as a trend indicator and when comparing against historical averages (typically higher). The low calculated value reflects the challenge in precisely quantifying “true” on-chain economic activity for real-time comparison. We believe growing institutional interest and use cases (e.g., Layer 2 solutions for faster, cheaper transactions) will continue to boost underlying utility, supporting a robust NVT that justifies current and future valuations.

Stock-to-Flow (S2F) Model

• The S2F model posits that Bitcoin’s value is derived from its scarcity, comparing its existing supply (“stock”) to the rate at which new Bitcoin is produced (“flow”).
• Current Calculation:
  • Stock (Circulating Supply): 19,974,124 BTC
  • Flow (Annual New Supply Post-Halving): 164,250 BTC (450 BTC/day * 365 days)
  • Current S2F Ratio: ~121.61
• Analysis: Bitcoin’s S2F ratio increased significantly after the April 2024 halving, placing it among the scarcest assets globally. Historically, increases in the S2F ratio have corresponded with substantial price increases. The model provides a fundamental argument for long-term appreciation based purely on supply dynamics and verifiable scarcity. We project this scarcity to continue driving significant investor interest.

Network Effects

• Bitcoin’s value is intrinsically linked to its network effects, often simplified by Metcalfe’s Law (value proportional to the square of the number of users/nodes). As the number of users, wallet addresses, developers, merchants, and institutional participants grows, the utility and security of the network increase exponentially.
• Analysis: The sustained growth in active wallet addresses, transaction count, and hash rate (as outlined in our operating assumptions) demonstrates the robust expansion of Bitcoin’s network. This accelerating network effect is a powerful, self-reinforcing value driver, contributing significantly to its long-term intrinsic value beyond simple supply/demand economics.

7. Key Risks

• Regulatory Uncertainty: Governments globally may impose stricter regulations, outright bans, or introduce unfavorable tax policies, significantly impacting Bitcoin’s adoption and price.
• Market Volatility: Bitcoin is known for extreme price swings, making it a high-risk asset. Rapid price declines can lead to substantial capital losses for investors.
• Technological Risks: While robust, the Bitcoin network faces potential risks from quantum computing advancements (if encryption is broken), undiscovered software vulnerabilities, or failure to adapt to future technological demands.
• Competition: The cryptocurrency landscape is dynamic, with new assets and technologies constantly emerging that could potentially challenge Bitcoin’s dominance as a store of value.
• Security Risks: Exchanges and individual wallets remain targets for hackers. Large-scale security breaches or 51% attacks on the network, though increasingly difficult, could erode trust and value.
• Macroeconomic Headwinds: A severe global economic downturn, significant interest rate hikes, or a broad ‘risk-off’ sentiment could lead to decreased investor appetite for speculative assets like Bitcoin.
• Environmental Concerns: The energy consumption of Bitcoin’s Proof-of-Work consensus mechanism continues to draw scrutiny, potentially leading to increased regulatory pressure or negative public perception.

8. Appendix

Disclaimer

This report is an Initiation of Coverage on Bitcoin EUR (BTC_EUR) and reflects the views and forecasts of the author based on publicly available information and analytical models. All financial estimates and price targets are inherently speculative and subject to change. Bitcoin and other cryptocurrencies are volatile assets, and investing in them carries significant risk, including the potential loss of principal. Investors should conduct their own due diligence and consult with a financial advisor before making any investment decisions.

AI-Generated Content Disclosure

This report has been generated by an Artificial Intelligence model based on the provided live market data, news, and specific instructions. While efforts have been made to ensure accuracy and adhere to the specified style and content requirements, it should not be considered as professional financial advice. All figures are estimates and reflect current market understanding and model assumptions.

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