Initiation of Coverage: Bitcoin EUR (BTC_EUR)

Rating: BUY

12-Month Price Target: €92,000

1. Key Data & Forecast Snapshot

• Current Price (BTC_EUR): €74950
• 12-Month Price Target: €92,000
• Potential Upside/Downside: +22.75%
  • Calculation: ((€92,000 – €74950) / €74950) * 100 = 22.75%
• Market Capitalization: €1,497,993,337,465 (~€1.50 Trillion)
• 24h Volume: €14,662,822,152 (~€14.66 Billion)
• 24h Change: -0.9983%

Key Investment Drivers (12-24 Months)

• Accelerating institutional adoption, driven by spot ETF inflows.
• Persistent supply scarcity post-halving.
• Growing integration into traditional finance infrastructure.
• Macroeconomic tailwinds supporting digital gold narrative.

Key Risks

• Heightened regulatory scrutiny.
• Significant market volatility.
• Global macroeconomic downturn.
• Competition from other digital assets.

2. Investment Thesis

We initiate coverage on Bitcoin (BTC_EUR) with a BUY rating and a 12-month price target of €92,000. Our thesis is predicated on Bitcoin’s maturation from a speculative asset to a recognized alternative store of value and foundational layer for the digital economy. The approval and success of spot Bitcoin ETFs have significantly broadened access for institutional capital, validating Bitcoin as a legitimate asset class. Coupled with its programmed supply scarcity, particularly post-halving events, we anticipate sustained demand-side pressure against a diminishing new supply, driving further price appreciation.

Bitcoin offers a unique value proposition as a censorship-resistant, permissionless, and globally transferable digital asset. In an environment characterized by increasing geopolitical uncertainty, inflationary pressures, and sovereign debt concerns, Bitcoin provides a robust, decentralized hedge. We foresee continued integration into global financial systems, enhanced by technological advancements like Layer 2 scaling solutions and increasing utility in cross-border payments and digital asset tokenization. While volatility remains a characteristic, we believe the long-term fundamentals support a bullish outlook, positioning Bitcoin for significant growth in the coming years.

3. Investment Positives

We rank the primary drivers for Bitcoin’s potential appreciation:

• 1. Accelerating Institutional Adoption & ETF Flows: The launch of spot Bitcoin ETFs in major markets has unlocked significant institutional capital previously unable to directly access the asset. This structural shift provides a regulated, accessible conduit for large-scale investment, evidenced by substantial net inflows. This trend is expected to continue as advisors and institutions allocate increasing portions of client portfolios (Source: SSGA, Pantera Capital, CoinDesk News).
• 2. Programmed Supply Scarcity & Halving Cycles: Bitcoin’s supply is capped at 21 million coins, with new supply issuance cut by approximately half every four years (the “halving”). This predictable, disinflationary monetary policy inherently drives scarcity. The reduced supply shock, combined with steady or increasing demand, historically contributes to upward price momentum post-halving.
• 3. Macroeconomic Tailwinds: Bitcoin benefits from its “digital gold” narrative, positioning it as an inflation hedge and an alternative store of value during periods of currency debasement or economic uncertainty. Concerns over fiat currency stability and expanding government debt support the case for a decentralized, hard-capped asset.
• 4. Robust Network Effects & Security: Bitcoin possesses the largest and most secure decentralized blockchain network globally, supported by a vast ecosystem of miners, developers, and users. This robust network ensures unparalleled security and resilience against attacks, enhancing its credibility and long-term viability as a foundational digital asset.
• 5. Technological Development & Ecosystem Growth: While primarily a store of value, Bitcoin’s ecosystem continues to evolve. Layer 2 solutions, such as the Lightning Network, enhance transaction speed and reduce costs, expanding its utility for micropayments. Further advancements in tokenization and smart contract capabilities on Bitcoin-based layers could unlock new use cases and demand drivers.

4. Competitive/Peer Analysis

Bitcoin vs. Gold

• Similarities: Both are scarce assets perceived as stores of value and hedges against inflation. Both have long histories of value retention.
• Bitcoin Advantages:
  • Digital Native: Easier to store, transfer, and divide. Can be sent globally 24/7 without intermediaries.
  • Programmable Scarcity: Fixed supply of 21 million, with a predictable issuance schedule, making it superior to gold’s unknown new supply (mining discoveries).
  • Censorship Resistance: Transactions are peer-to-peer and immutable, less susceptible to seizure or government control than physical gold.
  • Transparency: All transactions are verifiable on the public ledger.
• Gold Advantages:
  • Tangibility & History: Thousands of years of acceptance as money and value.
  • Lower Volatility: Historically less volatile than Bitcoin.
  • Industrial Use: Demand from jewelry and electronics.
• Conclusion: Bitcoin is evolving as “digital gold,” offering superior properties for the modern digital age, particularly in portability, divisibility, and provable scarcity. While gold remains a traditional hedge, Bitcoin offers a technologically advanced alternative.

Bitcoin vs. Ethereum (ETH)

• Similarities: Both are leading cryptocurrencies with large market capitalizations and active development communities. Both play critical roles in the digital asset ecosystem.
• Bitcoin (BTC):
  • Primary Use Case: Decentralized store of value, “digital gold.” Focus on security, censorship resistance, and predictable monetary policy.
  • Monetary Policy: Fixed supply cap (21 million), predictable halvings.
  • Consensus Mechanism: Proof-of-Work (PoW).
• Ethereum (ETH):
  • Primary Use Case: Smart contract platform, “digital oil.” Enables decentralized applications (DApps), DeFi, NFTs.
  • Monetary Policy: No fixed supply cap; issuance is deflationary post-Merge (ETH 2.0) due to transaction fee burning, but total supply can technically increase.
  • Consensus Mechanism: Proof-of-Stake (PoS).
• Conclusion: Bitcoin and Ethereum are complementary rather than direct competitors in their primary functions. Bitcoin serves as the base layer for digital value, while Ethereum acts as a platform for decentralized computation and innovation. Investors typically allocate to both for diversified exposure to the digital asset space.

5. Estimates & Operating Assumptions

Given Bitcoin’s nature as a decentralized digital asset, traditional operating metrics are not applicable. Our estimates are based on projected network adoption, macroeconomic trends, and supply dynamics. We assume a stable regulatory environment and continued technological advancements.

Key Assumptions (3-Year Forward Look)

• Institutional Inflows: Sustained net inflows into spot Bitcoin ETFs, coupled with increased corporate treasury allocations and sovereign wealth fund interest.
• Regulatory Environment: Gradual global regulatory clarity and acceptance, particularly in major economies like the US and EU.
• Network Growth: Continued growth in active addresses, transaction volumes, and overall network security (hash rate).
• Macroeconomic Conditions: Persistent global inflation concerns, alongside moderate economic growth, driving demand for alternative assets.
• Technological Resilience: No major protocol vulnerabilities or security breaches undermining trust.

Estimated Outlook (Price & Market Capitalization)

Circulating Supply (Estimated Average): ~19.75 Million BTC (growing slightly over time towards 21M limit)

• Year 1 (12 Months Forward – Target):
  • Price per BTC_EUR: €92,000
  • Estimated Market Cap: €1,817,000,000,000 (~€1.82 Trillion)
  • Calculation: €92,000 * 19,750,000 BTC = €1,817,000,000,000
• Year 2 (24 Months Forward):
  • Price per BTC_EUR: €115,000 – €125,000 (Midpoint: €120,000)
  • Estimated Market Cap: €2,286,000,000,000 – €2,488,000,000,000 (~€2.3 – €2.5 Trillion)
  • Calculation (Midpoint): €120,000 * 19,750,000 BTC = €2,370,000,000,000
• Year 3 (36 Months Forward):
  • Price per BTC_EUR: €140,000 – €160,000 (Midpoint: €150,000)
  • Estimated Market Cap: €2,779,000,000,000 – €3,172,000,000,000 (~€2.8 – €3.2 Trillion)
  • Calculation (Midpoint): €150,000 * 19,750,000 BTC = €2,962,500,000,000

These projections factor in continued institutional adoption, the effects of the recent halving, and potential for broader macroeconomic shifts towards digital assets. We acknowledge the inherent volatility and speculative nature of Bitcoin, and these estimates represent our base case under current market assumptions.

6. Valuation

Valuing Bitcoin requires non-traditional metrics due to its unique characteristics. We employ a combination of scarcity models, network valuation, and comparative analysis.

Network Value to Transaction (NVT) Ratio

• Concept: The NVT ratio divides Bitcoin’s market capitalization (Network Value) by its daily transaction volume (Transaction Value). It acts as a P/E ratio for the Bitcoin network.
• Interpretation: A high NVT ratio suggests the network’s valuation is growing faster than its utility (transactions), potentially indicating overvaluation. A low NVT suggests undervaluation.
• Current State: While the NVT ratio fluctuates, current levels, when viewed on a longer-term trend, suggest Bitcoin’s valuation is supported by its growing network utility and adoption. Sustained institutional inflows and Layer 2 development are expected to boost transaction activity, supporting higher NVT levels without necessarily implying overvaluation.

Stock-to-Flow (S2F) Model

• Concept: The S2F model relates Bitcoin’s price to its scarcity, defined by the ratio of existing supply (stock) to new supply being minted (flow). Assets with high S2F ratios (meaning new supply is small relative to existing supply) tend to be more valuable.
• Application: Bitcoin’s halving events dramatically increase its S2F ratio, historically followed by significant price appreciation. The model suggests that as Bitcoin’s S2F ratio approaches that of gold, its market cap could rival or exceed it.
• Limitations: The S2F model is purely supply-side and does not account for demand shocks, regulatory impacts, or black swan events. It serves as a long-term potential indicator rather than a precise short-term predictor.

Network Effects (Metcalfe’s Law)

• Concept: Metcalfe’s Law posits that the value of a telecommunications network is proportional to the square of the number of connected users. While not perfectly linear, the principle applies to Bitcoin.
• Application: As the number of active users, developers, miners, and businesses integrating Bitcoin grows, its overall utility and perceived value increase exponentially. This expanding network effect contributes significantly to Bitcoin’s long-term valuation.

Digital Gold Premium & Addressable Market

• Comparative Market Cap: We assess Bitcoin’s potential by comparing its market capitalization to that of gold.
  • Estimated Global Gold Market Cap: ~€13.5 Trillion (Source: Estimate based on current gold prices and total above-ground supply).
  • Bitcoin’s Current Market Cap: ~€1.5 Trillion.
  • Potential Penetration: If Bitcoin captures 15-20% of gold’s market capitalization over the next 3-5 years, its market cap could reach €2.0 – €2.7 Trillion.
• Target Price Calculation based on Gold Penetration (12m target):
  • Target 12m Market Cap: €1.82 Trillion (from Estimates section).
  • This represents ~13.5% of the estimated global gold market cap (€1.82T / €13.5T * 100 = 13.48%).
  • Implied Price: Given an estimated circulating supply of ~19.75 million BTC, a market cap of €1.82 Trillion implies a price of: €1,820,000,000,000 / 19,750,000 BTC = €92,151.90, consistent with our €92,000 target.

Our valuation thesis supports the €92,000 price target, driven by the increasing institutional adoption that validates Bitcoin’s position as a digital store of value. Continued ETF inflows and the post-halving supply shock are expected to drive Bitcoin’s market capitalization towards a significant share of the global store-of-value market.

7. Key Risks

• 1. Regulatory Scrutiny & Uncertainty: Evolving global regulations pose a significant risk. Potential for outright bans, restrictive taxation, or adverse policy decisions in key jurisdictions could negatively impact Bitcoin’s adoption and price.
• 2. Market Volatility: Bitcoin is highly volatile and prone to rapid price swings due to its relatively young market, speculative nature, and susceptibility to news events. Investors must be prepared for significant drawdowns.
• 3. Competition from Other Digital Assets: The proliferation of other cryptocurrencies, including central bank digital currencies (CBDCs) or technologically superior assets, could dilute Bitcoin’s market share or diminish its perceived value proposition.
• 4. Technological & Security Risks: While highly secure, the Bitcoin network is not immune to potential protocol vulnerabilities, security breaches, or the long-term threat of quantum computing rendering current encryption methods obsolete.
• 5. Macroeconomic Headwinds: A severe global recession, sustained high interest rates, or a flight to traditional safe-haven assets could dampen risk appetite and lead to outflows from speculative assets like Bitcoin.
• 6. Environmental Concerns: The energy consumption of Bitcoin’s Proof-of-Work mining remains a point of criticism. Increased regulatory pressure or public backlash regarding its environmental footprint could negatively impact sentiment and adoption, despite ongoing efforts to integrate renewable energy.

8. Appendix

Disclaimer: This report is for informational purposes only and does not constitute financial advice. The content and analysis herein are based on publicly available information and internal models. Prices and estimates are subject to change. Investing in digital assets is highly speculative and involves a risk of loss.

Compliance Note: This research report was generated by an AI model trained on extensive financial data and market analysis techniques.

Sources:

• Live Market Data: CoinGecko (Current Price, Market Cap, 24h Volume, 24h Change).
• Market News: Tavily Search (Cryptoslate, CoinDesk, AOL Finance, Pantera Capital, SSGA).
• General market knowledge and industry estimates for circulating supply, gold market cap, and valuation models (NVT, S2F).

Important Note / Wichtiger Hinweis:

EN: This report may contain AI-assisted analysis or be generated entirely by AI, which processes market data from publicly available sources for which altii accepts no responsibility for its accuracy. We strongly advise against using this report as a basis for investment decisions. Description of the altii BTC report.

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