Initiation of Coverage: Bitcoin EUR (BTC_EUR)

Key Data & Forecast Snapshot

We initiate coverage on Bitcoin EUR (BTC_EUR) with a BUY rating and a 12-month price target of €74,000. Our thesis is predicated on Bitcoin’s accelerating institutional adoption, its role as a digital strategic reserve, and its proven scarcity mechanism.

• Current Price: €59,320
• Market Cap: €1,185,756,769,883.88
• 24h Volume: €36,887,810,201.65
• 24h Change: +2.27%

12-Month Forecast

• Price Target: €74,000
  • Implied upside from current price: 24.75%
• Implied Market Cap: €1,480,000,000,000
  • Calculation: €74,000 (Target Price) * 20,000,000 (Estimated Circulating Supply)
  • Note: Estimated Circulating Supply = Current Market Cap / Current Price = €1,185,756,769,883.88 / €59,320 = ~20,000,000 BTC.
• Forecast 24h Volume: €44,265,372,241.98
  • Implied growth: 20% (reflecting increased institutional and retail liquidity)
  • Calculation: €36,887,810,201.65 * 1.20

Investment Thesis

Bitcoin (BTC) is transitioning from a niche digital asset to a globally recognized, strategically significant store of value. Our BUY rating on BTC_EUR reflects our conviction in its continued ascent driven by unparalleled scarcity, escalating institutional demand, and its emerging status as a formalized strategic reserve. The recent formalization of Bitcoin as a strategic reserve by the U.S. government, alongside surging institutional demand, marks a pivotal inflection point, underscoring its growing legitimacy and long-term potential.

We view Bitcoin as “Digital Gold 2.0,” possessing superior properties of divisibility, portability, and censorship resistance, while offering a hedge against fiat currency debasement and geopolitical uncertainty. Its flow-driven price action, amplified by limited supply and increasing adoption, positions it favorably in an evolving macroeconomic landscape.

Investment Positives

Rank-ordered drivers:

1. Accelerating Institutional Adoption & Strategic Reserve Status

   • The U.S. formalizing Bitcoin as a strategic reserve (Markets Financial Content, Feb 11, 2026) provides significant state-level validation and could trigger broader governmental and corporate treasury allocations.
   • Executives across the crypto ecosystem report unprecedented institutional demand (CoinDesk, Feb 13, 2026), further propelled by the “Genius Act ripple effect.” This signals a shift from speculative interest to strategic, long-term portfolio integration.
   • The approval and success of spot Bitcoin ETFs in major jurisdictions are driving substantial inflows, making Bitcoin more accessible to traditional investors and increasing its liquidity and price discovery efficiency (AInvest, Feb 26, 2026; SSGA, recent insights).

2. Programmatic Scarcity & Halving Cycles

   • Bitcoin’s fixed supply cap of 21 million units and its pre-programmed “halving” events (which reduce new supply issuance by 50% approximately every four years) create a predictable scarcity model. This deflationary characteristic is a core value proposition, distinguishing it from fiat currencies subject to inflationary monetary policies.
   • The recent halving event (April 2024) has historically preceded significant price appreciation cycles, by reducing sell-side pressure from miners and amplifying demand-side forces.

3. Macroeconomic Hedge & Digital Gold Narrative

   • Bitcoin continues to gain traction as a hedge against inflation and geopolitical instability. Its decentralized nature and lack of reliance on central authorities make it an attractive alternative asset during periods of economic uncertainty and currency debasement.
   • Its comparison to gold as a store of value is strengthening, with many investors now viewing it as a superior digital alternative due to its ease of transfer, divisibility, and provable scarcity.

4. Robust Network Effects & Security

   • The Bitcoin network benefits from strong network effects, including a vast global user base, increasing developer activity, and a highly secure proof-of-work consensus mechanism.
   • The growing hash rate signifies increasing computational power dedicated to securing the network, making it progressively more resistant to attacks and enhancing its credibility as a reliable asset.

Competitive/Peer Analysis

Bitcoin vs. Gold (XAU)

• Store of Value: Both serve as stores of value, but Bitcoin offers superior digital properties.
  • Portability & Divisibility: Bitcoin is digitally portable across borders instantly and divisible into 100 million units (satoshis), far exceeding physical gold’s limitations.
  • Scarcity: Bitcoin has a mathematically provable, absolute scarcity of 21 million units. Gold’s scarcity, while high, is subject to new discoveries and mining advancements.
  • Verification: Bitcoin’s authenticity is cryptographically verifiable by anyone, at any time. Gold requires specialized assaying.
  • Storage: Bitcoin can be self-custodied with minimal cost, or stored securely with institutional custodians. Physical gold incurs significant storage, insurance, and security costs.
  • Decentralization: Both are decentralized, but Bitcoin’s blockchain provides an immutable, transparent ledger without intermediaries.
  • Volatility: Bitcoin exhibits higher short-term volatility than gold, but its long-term return profile has significantly outperformed.
• Conclusion: Bitcoin is increasingly viewed as “Digital Gold,” a technologically advanced successor to gold for the digital age, attracting capital from traditional gold allocations.

Bitcoin vs. Ethereum (ETH)

• Core Purpose: Fundamental difference in value proposition.
  • Bitcoin (BTC): Primarily a decentralized, permissionless, scarce digital store of value and medium of exchange. Its scripting language is limited, focusing on security and stability for value transfer.
  • Ethereum (ETH): A decentralized smart contract platform designed for building and hosting decentralized applications (dApps), NFTs, and decentralized finance (DeFi). ETH is the “gas” that powers the network and is also evolving as a store of value (post-Merge, deflationary tokenomics).
• Technology & Consensus:
  • Bitcoin: Uses Proof-of-Work (PoW), prioritizing security, decentralization, and immutability over transactional speed for its specific use case.
  • Ethereum: Transitioned to Proof-of-Stake (PoS) with “The Merge,” aiming for greater energy efficiency, scalability, and yield generation through staking.
• Supply & Tokenomics:
  • Bitcoin: Fixed supply of 21 million BTC, with predictable halving events.
  • Ethereum: No fixed supply cap, but ETH supply is reduced through transaction fee burning (EIP-1559), potentially making it deflationary under certain network conditions.
• Conclusion: Bitcoin and Ethereum are complementary rather than direct competitors. Bitcoin serves as the foundational digital reserve asset, while Ethereum acts as the primary platform for blockchain innovation and application development. A diversified crypto portfolio often includes both.

Estimates & Operating Assumptions (3-year forward looking)

Forecasting Bitcoin’s performance involves assumptions around macro-economic trends, institutional adoption rates, and network dynamics rather than traditional operating metrics. Our estimates are based on current adoption trajectories, historical halving cycles, and the assumption of continued regulatory clarity and institutional inflows.

Price & Market Capitalization (Year-end)

Key Operating Assumptions (Qualitative & Quantitative)

• Network Hash Rate Growth: We project a sustained 20-30% year-over-year increase, reflecting continued investment in mining infrastructure and network security as Bitcoin’s value appreciates.
• Daily Transaction Count: We anticipate a 15-25% year-over-year increase, driven by greater adoption of layer-2 solutions like the Lightning Network and expanding use cases for micro-transactions.
• Institutional AUM in Bitcoin Products: Significant growth is expected, with an initial 50-100% year-over-year increase tapering to 30-50% in subsequent years, fueled by ETF inflows, pension fund allocations, and sovereign wealth fund interest.
• Regulatory Framework: Assumed continued progress towards clearer and more favorable regulatory frameworks globally, fostering greater institutional confidence and participation.

Valuation

Stock-to-Flow (S2F) Model

• Concept: The S2F model posits a relationship between an asset’s scarcity (Stock = existing supply; Flow = new supply per year) and its market value. Higher S2F implies greater scarcity and, historically, higher value for scarce assets like gold and silver.
• Current Calculation:
  • Current Circulating Supply (Stock): ~20,000,000 BTC (as of report date)
  • Annual New Supply (Flow): 328,500 BTC/year (6.25 BTC/block * 144 blocks/day * 365 days/year until next halving)
  • Current S2F Ratio: 20,000,000 / 328,500 = ~60.89
• Implication: Bitcoin’s S2F ratio is comparable to or exceeds that of gold (historically ~60). The S2F model suggests that Bitcoin, with its predictable and diminishing flow, will continue to appreciate as its scarcity value is increasingly recognized by markets. The model has historically indicated that Bitcoin’s price trajectory is closely linked to its S2F ratio, especially post-halving events.

Network Value to Transactions (NVT) Ratio

• Concept: NVT is calculated as Market Capitalization / Daily On-chain Transaction Value. It functions similarly to a P/E ratio for traditional assets, indicating whether the network’s valuation is justified by its utility (transaction volume). A high NVT might suggest overvaluation relative to current network usage, while a low NVT might suggest undervaluation.
• Current Estimate & Caveat:
  • Current Market Cap: €1,185,756,769,883.88
  • Note: Precise real-time on-chain transaction value data is dynamic and requires specialized data sources beyond live market quotes. For illustrative purposes, we estimate daily on-chain transaction value as approximately 5% of the reported 24h trading volume, which is a broad proxy.
  • Estimated Daily On-chain Transaction Value (Proxy): €36,887,810,201.65 (24h Volume) * 0.05 = ~€1,844,390,510
  • Estimated NVT Ratio (Proxy): €1,185,756,769,883.88 / €1,844,390,510 = ~643
• Implication: This high NVT proxy suggests that Bitcoin’s current valuation is heavily weighted by its store-of-value proposition and future growth expectations rather than immediate transactional utility. This is consistent with its “digital gold” narrative, where intrinsic value is derived from scarcity and network security rather than high transactional throughput. As institutional adoption increases, NVT may stabilize or even decrease if on-chain volume growth outpaces market cap growth, indicating growing utility and broader economic integration.

Network Effects

• Concept: Bitcoin’s value is significantly driven by Metcalfe’s Law, which states that the value of a telecommunications network is proportional to the square of the number of connected users. As more users, developers, businesses, and institutions adopt Bitcoin, its network grows stronger, more secure, and more valuable.
• Key Indicators:
  • User Growth: Increasing number of active addresses, wallet holders, and exchange users.
  • Developer Activity: Robust and continuous development on the core protocol and Layer-2 solutions like Lightning Network.
  • Infrastructure Expansion: Growth in payment processors, custody solutions, mining operations, and institutional products (ETFs, derivatives).
  • Brand Recognition: Universal brand recognition and increasing public discourse on Bitcoin’s role in the global financial system.
• Implication: The continued expansion of Bitcoin’s network effects acts as a self-reinforcing mechanism, driving further adoption and value appreciation. Institutional legitimization accelerates this effect by bringing a new cohort of users and capital into the ecosystem.

Key Risks

1. Regulatory Headwinds

   • While regulation is progressing, adverse or overly restrictive regulatory actions by major governments (e.g., outright bans, onerous taxation, or severe restrictions on usage/mining) could significantly impact Bitcoin’s price and adoption. The pace and nature of global regulatory harmonization remain uncertain.

2. Technological Risks

   • Though highly secure, the possibility of a major security vulnerability in the Bitcoin protocol or a successful 51% attack, while decreasingly likely, could severely undermine trust and value.
   • Advances in quantum computing, if realized, could theoretically threaten Bitcoin’s cryptographic security, though research into quantum-resistant cryptography is ongoing.

3. Competition from Alternative Cryptocurrencies & CBDCs

   • The rise of other cryptocurrencies (altcoins) offering different features or scalability solutions could divert investor interest and capital.
   • Central Bank Digital Currencies (CBDCs) introduced by governments could present a state-backed alternative to decentralized digital money, potentially impacting Bitcoin’s narrative as a medium of exchange, though less so its store of value proposition.

4. Market Volatility & Speculative Nature

   • Bitcoin is known for extreme price volatility, driven by speculative trading, sentiment shifts, and macroeconomic factors. This volatility poses significant risk for investors, particularly in the short to medium term.
   • The potential for “blow-off top” risks and significant price corrections remains a factor, as highlighted by recent market commentary (Ad Hoc News, recent commentary).

5. Environmental Concerns

   • The energy consumption of Bitcoin’s Proof-of-Work mining process continues to attract criticism. Increased regulatory pressure or public backlash regarding its environmental impact could lead to restrictions or disincentivize adoption, although the industry is actively shifting towards renewable energy sources.

6. Macroeconomic Shifts

   • Significant shifts in global macroeconomic conditions, such as sustained high interest rates, a deep global recession, or a stronger dollar, could reduce risk appetite for speculative assets like Bitcoin, impacting its price.
   • Conversely, easing monetary policy or increased inflation could act as tailwinds.

Appendix

Disclaimer

This report is for informational purposes only and does not constitute financial advice. The opinions and estimates expressed herein are based on our judgment as of the date of this report and are subject to change without notice. All investments involve risk, and the value of investments and the income derived from them can fluctuate. Past performance is not indicative of future results. Investors should consult with a qualified financial professional before making any investment decisions.

Sources

• Live Market Data: CoinGecko (as of report generation)
• Live Market News: Tavily Search (as of report generation), citing:
  • Markets Financial Content: “Bitcoin Vaults to New Highs as U.S. Formalizes Strategic Reserve”
  • CoinDesk: “The Genius Act ripple effect: Sui executives say institutional demand…”
  • Ad Hoc News: “Bitcoin’s Next Move: Massive Opportunity Or Blow-Off Top Risk For…”
  • AInvest: “Bitcoin’s $1.4T Valuation: Flow-Driven Price Action”
  • SSGA: “Why bitcoin institutional demand is on the rise”
• Valuation Models & Estimates: Based on general market knowledge, historical data, and assumptions by the AI model (2024/2025).

This report was generated by an AI assistant and reflects analysis based on provided data and programmed financial knowledge.

Important Note / Wichtiger Hinweis:

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