Initiation of Coverage: Bitcoin EUR (BTC_EUR)

1. Key Data & Forecast Snapshot

Current Market Data (Source: CoinGecko)

• Current Price: €74450
• Market Cap: €1486625633750.461
• 24h Volume: €13254356299.775913
• 24h Change: +0.26%

12-Month Forecasts

• 12m Price Target: €93062.5
• Potential Upside: +25.0%
• 12m Market Cap Target: €1858542718100.94

Calculation for 12m Price Target: €74450 * (1 + 0.25) = €93062.5

Calculation for 12m Market Cap Target: Assuming current circulating supply of approximately 19,969,578.69 BTC (€1486625633750.461 / €74450), the target market cap is 19,969,578.69 BTC * €93062.5/BTC = €1858542718100.94.

Recommendation: Buy

2. Investment Thesis: Why Now for Bitcoin EUR

Bitcoin (BTC) stands at a pivotal juncture, transitioning from a speculative asset to a recognized component of institutional portfolios. We initiate coverage on BTC_EUR with a Buy recommendation and a 12-month price target of €93062.5, reflecting a +25% upside potential.

Our bullish stance is predicated on several converging factors:

• Institutional Integration: The approval and success of spot Bitcoin ETFs in major markets have significantly lowered barriers to entry for institutional capital. This trend is expected to accelerate, positioning Bitcoin as a legitimate allocation for diversified portfolios, as evidenced by increasing institutional demand and outlooks pointing to 2026 as an inflection point for broader adoption.
• Digital Gold Narrative Strengthening: Bitcoin’s fixed supply, programmatic scarcity (halving events), and censorship resistance reinforce its appeal as a robust store of value and a potential hedge against inflation and currency debasement. In an environment of ongoing geopolitical uncertainty and evolving monetary policy, Bitcoin offers a compelling alternative to traditional safe-haven assets.
• Network Security and Resilience: The Bitcoin network continues to demonstrate unparalleled security, decentralization, and uptime. Its robust infrastructure ensures integrity and reliability, foundational attributes for long-term value appreciation.
• Increasing Utility and Accessibility: Beyond its role as a store of value, advancements in layer-2 solutions like the Lightning Network enhance Bitcoin’s utility for faster and cheaper transactions, broadening its potential applications and user base. Global accessibility further strengthens its network effects.

We believe the current market valuation offers an attractive entry point, ahead of anticipated continued institutional inflows and the long-term impacts of its scarcity model. Bitcoin is evolving into a foundational digital asset, warranting its inclusion in forward-looking investment strategies.

3. Investment Positives

We identify several key drivers underpinning our positive outlook for Bitcoin EUR, ranked by perceived impact:

• 1. Accelerating Institutional Adoption: The approval of spot Bitcoin ETFs has unlocked significant capital from traditional financial institutions. Pension funds, asset managers, and corporate treasuries are increasingly exploring Bitcoin allocations for diversification and return potential. Live news indicates a robust 2026 institutional crypto outlook, signaling sustained demand.
• 2. Programmatic Scarcity and Halving Cycles: Bitcoin’s supply is capped at 21 million coins, with new supply issuance cut in half approximately every four years (halving events). This inherent scarcity, coupled with increasing demand, creates a powerful upward pressure on price over the long term, mirroring a “digital gold” narrative.
• 3. Robust Network Security and Decentralization: Bitcoin’s proof-of-work consensus mechanism and global network of miners ensure high levels of security and resistance to censorship or manipulation. This fundamental strength provides a reliable foundation for its value proposition.
• 4. Macroeconomic Hedging Properties: Bitcoin is increasingly viewed as an effective hedge against inflation and sovereign currency devaluation. Its uncorrelated nature with traditional asset classes can enhance portfolio diversification, particularly during periods of economic uncertainty.
• 5. Growing Global Accessibility and Liquidity: As Bitcoin gains wider acceptance, its liquidity across exchanges and jurisdictions continues to improve. This enhanced accessibility facilitates easier entry and exit for investors, contributing to market efficiency and price discovery.

4. Competitive/Peer Analysis

Bitcoin vs. Gold (Digital Gold vs. Physical Gold)

• Store of Value: Both are considered stores of value. Bitcoin is often termed “digital gold” due to its scarcity and inflation-resistant properties. Gold has a millennia-long history as a store of value.
• Scarcity: Bitcoin has a hard cap of 21 million coins, with predictable supply issuance via halving. Gold’s supply, while finite, is subject to new discoveries and mining technology.
• Portability & Divisibility: Bitcoin is highly portable (transferable globally with an internet connection) and divisible (to eight decimal places). Gold is heavy, requires secure storage, and is less divisible for small transactions.
• Verification: Bitcoin’s authenticity is cryptographically verifiable on the blockchain. Gold requires physical inspection and assays.
• Transaction Costs: Bitcoin transactions incur network fees, but global transfers can be significantly cheaper than shipping and insuring physical gold.
• Market Cap: Gold’s market cap is significantly larger than Bitcoin’s, but Bitcoin has demonstrated higher growth potential and volatility.

Bitcoin vs. Ethereum (Store of Value vs. Smart Contract Platform)

• Primary Use Case: Bitcoin is primarily a store of value and a medium of exchange. Ethereum’s primary use case is as a decentralized platform for smart contracts and decentralized applications (dApps), forming the backbone of Web3.
• Consensus Mechanism: Bitcoin uses Proof-of-Work (PoW). Ethereum transitioned to Proof-of-Stake (PoS) with “The Merge,” aiming for lower energy consumption and higher scalability.
• Scarcity & Supply: Bitcoin has a fixed supply cap (21 million BTC) and deflationary issuance through halving. Ethereum has a dynamic supply model, with a capped annual issuance and a burn mechanism that can make it deflationary under certain network conditions.
• Network Effects: Bitcoin’s network effects stem from its first-mover advantage, robust security, and widespread recognition as digital money. Ethereum’s network effects derive from its developer ecosystem, dApp proliferation, and role in DeFi and NFTs.
• Scalability: Bitcoin relies on Layer-2 solutions (e.g., Lightning Network) for scalability. Ethereum aims for scalability through sharding and other upgrades within its PoS roadmap.
• Investment Profile: Bitcoin is often seen as a more conservative, long-term store of value play within the crypto space. Ethereum offers exposure to the broader decentralized application economy and its higher growth potential comes with increased risk.

5. Estimates & Operating Assumptions (3-Year Forward Looking)

For Bitcoin, traditional “operating assumptions” as seen in corporate finance are not applicable. Instead, we focus on key network metrics and market dynamics that influence its value proposition.

Key Metric Projections (Estimates based on historical trends, institutional adoption, and halving cycles)

• Network Hash Rate (EH/s): A measure of network security.
  • Current (Est.): 600-700 EH/s (highly variable)
  • 1-Year Forward (2025): 750-900 EH/s (driven by continued mining innovation and profitability)
  • 2-Year Forward (2026): 900-1100 EH/s (growth continues, supported by infrastructure investment)
  • 3-Year Forward (2027): 1100-1300 EH/s (reflects ongoing decentralization and security improvements)
• Daily Transaction Volume (EUR equivalent, on-chain): Reflects network utility.
  • Current (Est.): €5-10 Billion (on-chain value, not exchange trading volume)
  • 1-Year Forward (2025): €8-15 Billion (adoption, layer-2 growth)
  • 2-Year Forward (2026): €12-20 Billion (further mainstream integration)
  • 3-Year Forward (2027): €15-25 Billion (enhanced utility, global reach)
• Active Addresses (million): Indicator of user growth and engagement.
  • Current (Est.): 1-1.5 million
  • 1-Year Forward (2025): 1.5-2.0 million
  • 2-Year Forward (2026): 2.0-2.5 million
  • 3-Year Forward (2027): 2.5-3.0 million
• Implied Volatility (Annualized, %): Expected price fluctuation.
  • Current (Est.): 45-60%
  • 1-Year Forward (2025): 40-55% (potential for slight moderation with institutional maturity)
  • 2-Year Forward (2026): 35-50% (continued institutionalization could reduce extreme swings)
  • 3-Year Forward (2027): 30-45% (gradual convergence towards traditional asset volatility, but still elevated)
• Price Growth Expectation (CAGR %): Overall price appreciation.
  • 1-Year Forward (2025): 20-30%
  • 2-Year Forward (2026): 15-25% (post-halving momentum, institutional catalysts)
  • 3-Year Forward (2027): 10-20% (sustained growth, but potentially at a slower pace than early adoption)

6. Valuation

Traditional valuation methodologies (e.g., DCF, P/E ratios) are not directly applicable to Bitcoin due to its nature as a digital commodity/currency. We rely on crypto-native metrics and economic models to assess its value.

Network Value to Transactions (NVT) Ratio

The NVT ratio compares Bitcoin’s market capitalization (network value) to the value of transactions processed on its blockchain. A high NVT may suggest an overvalued network, while a low NVT could indicate undervaluation or increased utility relative to market value.

• Current NVT (simplified): Market Cap / 24h Volume (from provided live data)
• Calculation: €1486625633750.461 / €13254356299.775913 = 112.16
• Interpretation: This simplified NVT indicates that the network’s value is approximately 112 times its daily trading volume. While this specific metric uses trading volume as a proxy for network activity (rather than solely on-chain transaction value, which is typically lower), it provides a useful snapshot of market enthusiasm relative to liquidity. Sustained institutional inflows and broader utility are expected to keep this ratio robust, with potential for moderation if underlying transaction activity scales significantly.

Stock-to-Flow (S2F) Model

The S2F model relates Bitcoin’s scarcity (stock) to its annual production (flow). Higher S2F ratios correlate with higher prices due to increasing scarcity. This model has historically demonstrated a strong correlation with Bitcoin’s price movements, particularly around halving events.

• Mechanism: Halving events periodically reduce the “flow” (new Bitcoin supply), thereby increasing the S2F ratio. Post-halving, the model typically predicts significant price appreciation due to enhanced scarcity.
• Implication: Following the most recent halving, Bitcoin’s S2F ratio has increased. If historical patterns hold, this fundamental scarcity mechanism provides a strong long-term tailwind for price appreciation, aligning with the “digital gold” narrative.

Network Effects (Metcalfe’s Law)

Metcalfe’s Law posits that the value of a telecommunications network is proportional to the square of the number of connected users. While a precise quantification for Bitcoin is challenging, the principle applies:

• User Adoption: As more individuals, institutions, and businesses adopt Bitcoin for transactions, savings, or investment, the utility and value of the network increase exponentially.
• Ecosystem Growth: Growth in supporting infrastructure (exchanges, wallets, layer-2 solutions, financial products like ETFs) further strengthens the network effect, enhancing liquidity, accessibility, and overall resilience.

7. Key Risks

Investing in Bitcoin carries substantial risks. Investors should consider the following before making an allocation decision:

• Regulatory Uncertainty: The global regulatory landscape for cryptocurrencies remains fragmented and evolving. Adverse regulatory actions, outright bans, or restrictive taxation policies in major jurisdictions could significantly impact Bitcoin’s price and adoption.
• Market Volatility and Drawdowns: Bitcoin is historically highly volatile, subject to rapid and significant price swings. Investors should be prepared for potential large drawdowns, which can be more severe and prolonged than in traditional asset classes.
• Technological Risks: Despite its robust security, Bitcoin faces potential technological risks including quantum computing advancements (which could theoretically compromise cryptographic security), software bugs, or network vulnerabilities.
• Competition: Bitcoin faces competition from other cryptocurrencies (“altcoins”), central bank digital currencies (CBDCs), and evolving digital payment systems, which could erode its market dominance or use cases.
• Macroeconomic Headwinds: An unexpected shift to a highly deflationary environment, aggressive global interest rate hikes, or a widespread flight to traditional safe havens could negatively impact demand for Bitcoin.
• Environmental Concerns: The energy consumption associated with Bitcoin’s Proof-of-Work mining continues to draw scrutiny. Increased regulatory pressure or public backlash regarding its environmental footprint could lead to policy changes or reduced institutional interest.
• Liquidity Risk: While overall liquidity has improved, significant market events or “black swan” scenarios could still trigger periods of illiquidity, making it difficult to exit positions without substantial price impact.

8. Appendix

Glossary of Terms

• Bitcoin (BTC): A decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.
• BTC_EUR: Bitcoin priced in Euro.
• Halving: A pre-programmed event in Bitcoin’s protocol that halves the reward for mining new blocks, thereby reducing the rate at which new bitcoins are created. Occurs approximately every four years.
• Hash Rate: The total combined computational power used to mine and process transactions on a Proof-of-Work blockchain, such as Bitcoin. Higher hash rate indicates stronger network security.
• Market Capitalization (Market Cap): The total value of all circulating bitcoins, calculated by multiplying the current price of Bitcoin by the total number of bitcoins in circulation.
• NVT Ratio (Network Value to Transactions): A valuation metric comparing Bitcoin’s market cap to its daily on-chain transaction volume. A higher ratio can imply overvaluation or reduced utility relative to market value.
• Spot Bitcoin ETF: An Exchange Traded Fund that directly holds Bitcoin, allowing investors to gain exposure to Bitcoin’s price movements without directly owning the asset.
• Stock-to-Flow (S2F) Model: A valuation model that quantifies scarcity by comparing the existing supply (stock) of an asset to its annual production (flow).
• 24h Volume: The total value of Bitcoin traded on exchanges over a 24-hour period.

Methodology for Forecasts

Our 12-month price target and long-term estimates are derived from a combination of qualitative and quantitative analysis, including:

• Historical Price Analysis: Examining past Bitcoin price cycles, particularly around halving events.
• Institutional Adoption Trajectory: Assessing the impact of spot ETFs, corporate treasury allocations, and traditional finance integration based on market commentary and news (e.g., 2026 institutional outlook).
• Macroeconomic Factors: Considering global inflation trends, interest rate environments, and geopolitical stability, which influence Bitcoin’s appeal as a safe haven or inflation hedge.
• Network Fundamentals: Analyzing trends in hash rate, active addresses, and on-chain transaction volumes as indicators of network health and utility.
• Scarcity Model: Applying the principles of the Stock-to-Flow model and Bitcoin’s fixed supply cap to project long-term value.

These forecasts inherently involve significant assumptions and are subject to the key risks outlined in this report.

Disclaimer

This report has been generated by an Artificial Intelligence (AI) model based on provided market data, news articles, and general financial knowledge up to the last available training data. It is intended for informational purposes only and does not constitute financial advice, an offer to sell, or a solicitation of an offer to buy any securities or cryptocurrencies. Investing in cryptocurrencies involves significant risks, including the potential loss of principal. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.

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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