Initiation of Coverage: Bitcoin EUR (BTC_EUR)

Key Data & Forecast Snapshot

• Recommendation: Overweight
• Risk Profile: High
• Current Price (BTC_EUR): €74587
• 12m Price Target (BTC_EUR): €98000
• Implied 12m Upside: +31.4%
• Current Market Cap: €1489.5 Billion
• 12m Market Cap Target: €1930.6 Billion (Based on ~19.7M circulating supply * €98000 target)
• 24h Volume (Current): €30.2 Billion
• 24h Change (Current): -1.01%
• Key Catalyst: Accelerating institutional adoption and post-halving scarcity.

Investment Thesis: Digital Scarcity Meets Institutional Demand

We initiate coverage on Bitcoin EUR (BTC_EUR) with an Overweight rating and a 12-month price target of €98000. Our conviction is predicated on Bitcoin’s foundational role as a truly scarce digital asset, its increasing validation as “digital gold,” and a structural shift in capital markets driven by accelerating institutional adoption. The recent approval of spot Bitcoin ETFs in major jurisdictions has opened a significant new channel for traditional finance to allocate capital, fundamentally altering Bitcoin’s demand dynamics. Coupled with the April 2024 halving event, which further constricts new supply, we anticipate a sustained period of price appreciation as demand outstrips diminishing available float.

• Scarcity & Digital Gold Narrative: Bitcoin’s fixed supply cap of 21 million units and predictable halving schedule reinforce its scarcity. In an environment of persistent fiscal deficits and potential currency debasement, Bitcoin offers an uncorrelated, permissionless, and censorship-resistant store of value.
• Institutional Adoption Surge: Spot Bitcoin ETFs have democratized access for institutional investors, including pension funds, endowments, and wealth managers. This provides a clear, regulated, and scalable onramp for capital, as evidenced by sustained inflows. News indicates expectations for this trend to continue and intensify through 2026.
• Post-Halving Dynamics: The April 2024 halving reduced the daily issuance of new Bitcoin by 50%, exacerbating supply-side constraints. Historically, halving events precede significant price rallies in the 12-18 months following the reduction in new supply.
• Robust Network Security: Bitcoin maintains the most secure and decentralized blockchain network, underpinned by a vast global mining infrastructure. This security is paramount to its value proposition as a trusted, immutable ledger.
• Global Macro Tailwinds: Potential interest rate cuts by central banks globally and ongoing geopolitical uncertainty could further enhance the appeal of scarce, non-sovereign assets like Bitcoin.

Investment Positives (Rank-Ordered Drivers)

1. Accelerating Institutional Inflows & Accessibility

   • Spot Bitcoin ETFs have unlocked a massive new demand channel for traditional investors, providing regulated access and reducing friction.
   • Significant capital allocators are now integrating Bitcoin into portfolio strategies, moving beyond early adopter and retail-only interest.
   • Expected continued institutional adoption through 2026 (Source: Tavily Search, Ainvest.com, ssga.com, pymnts.com).

2. Post-Halving Scarcity Shock

   • The April 2024 halving reduced the daily issuance of new Bitcoin from 6.25 BTC to 3.125 BTC per block, effectively cutting new supply by 50%.
   • This supply shock, combined with growing demand, historically acts as a powerful catalyst for price appreciation in subsequent cycles.
   • The fixed supply cap of 21 million Bitcoin underpins its scarcity value, making it fundamentally different from fiat currencies.

3. Digital Gold Narrative & Macro Environment

   • Bitcoin is increasingly viewed as a “digital gold” – a safe haven asset and inflation hedge, particularly in an era of quantitative easing and escalating sovereign debt.
   • Potential global interest rate cuts could diminish the appeal of traditional fixed-income assets, driving capital towards non-yielding, scarce assets.
   • Geopolitical instability reinforces demand for decentralized, censorship-resistant assets.

4. Network Security & Decentralization

   • Bitcoin’s proof-of-work mechanism and distributed global mining network ensure unparalleled security and resistance to censorship or manipulation.
   • Its decentralized nature means no single entity can control or shut down the network, enhancing its value proposition as a sovereign asset.

5. Global Accessibility & Innovation

   • Bitcoin is a borderless, permissionless asset accessible to anyone with an internet connection, offering financial inclusion and remittances solutions.
   • Ongoing development on Layer 2 solutions (e.g., Lightning Network) enhances scalability and utility, improving transaction speed and cost efficiency.

Competitive/Peer Analysis

Bitcoin (BTC) vs. Gold

• Similarities: Both serve as stores of value, possess scarcity, and act as hedges against inflation and geopolitical risk.
• Differences:
  • Portability & Divisibility: Bitcoin is highly portable (digital, sent anywhere globally) and divisible (to eight decimal places), unlike physical gold.
  • Verifiability: Bitcoin’s authenticity is cryptographically verifiable, eliminating counterfeiting risks inherent with gold.
  • Scarcity: Bitcoin has a mathematically fixed supply cap (21 million), whereas gold’s supply is unknown and subject to new discoveries.
  • Volatility: Bitcoin exhibits significantly higher price volatility than gold, reflecting its nascent market and digital nature.
  • Custody: Bitcoin can be self-custodied with high security, while gold custody involves physical security and storage costs.
• Conclusion: Bitcoin offers a superior “digital gold” proposition in the 21st century, combining gold’s core attributes with digital-native advantages.

Bitcoin (BTC) vs. Ethereum (ETH)

• Similarities: Both are decentralized digital assets built on blockchain technology.
• Differences:
  • Primary Use Case: Bitcoin is predominantly a store of value and medium of exchange (“digital gold”). Ethereum is a smart contract platform, serving as the foundational layer for decentralized applications (dApps), DeFi, and NFTs.
  • Supply Mechanics: Bitcoin has a fixed supply cap of 21 million. Ethereum’s supply is not fixed, though it has deflationary mechanisms post-Merge (EIP-1559 burns transaction fees).
  • Consensus Mechanism: Bitcoin uses Proof-of-Work (PoW). Ethereum transitioned from PoW to Proof-of-Stake (PoS) with “The Merge,” aiming for greater energy efficiency and scalability.
  • Scalability: Ethereum aims for higher transaction throughput via sharding and Layer 2 solutions, designed to host a vast ecosystem of applications. Bitcoin’s primary chain prioritizes security and decentralization, with Layer 2s like Lightning Network for faster payments.
• Conclusion: Bitcoin and Ethereum are complementary assets serving different, yet critical, functions within the digital asset ecosystem. Bitcoin maintains its pre-eminent position as the scarcity asset.

Estimates & Operating Assumptions (3-Year Forward)

Circulating Supply & Issuance

• Current Circulating Supply (Approx.): 19.7 Million BTC
• Post-Halving Annual Issuance: Approximately 273,750 BTC per year (3.125 BTC/block * 6 blocks/hour * 24 hours/day * 365 days/year).
• End 2024 Circulating Supply (Est.): ~19.8 Million BTC
• End 2025 Circulating Supply (Est.): ~19.95 Million BTC
• End 2026 Circulating Supply (Est.): ~20.1 Million BTC

Network Activity & Security

• Hash Rate (EH/s) Growth: We project continued growth in the Bitcoin network’s hash rate, driven by ongoing miner investment and technological advancements. This reinforces network security.
  • End 2024 Est.: +15-20% Y/Y
  • End 2025 Est.: +15-20% Y/Y
  • End 2026 Est.: +10-15% Y/Y
• Daily Transaction Volume (EUR Equivalent): Anticipate an increase in daily transaction volume as adoption grows, particularly with the expanding use of Layer 2 solutions.
  • End 2024 Est.: €5-7 Billion (On-chain, adjusted)
  • End 2025 Est.: €8-10 Billion (On-chain, adjusted)
  • End 2026 Est.: €10-12 Billion (On-chain, adjusted)

Bitcoin Price Forecast (BTC_EUR)

• 12m Target: €98,000
• End 2024 Est.: €90,000
  • Rationale: Reflects initial post-halving appreciation and sustained institutional inflows, with potential for consolidation towards year-end.
• End 2025 Est.: €120,000
  • Rationale: Full realization of post-halving bull cycle effects, deepening institutional integration, and favorable macro tailwinds.
• End 2026 Est.: €150,000
  • Rationale: Continued scarcity premium, mature institutional participation, and broader global recognition as a reserve asset.

Valuation

Our €98,000 12-month price target for BTC_EUR is derived from a multi-faceted approach, incorporating scarcity models, historical cycle analysis, and demand forecasts driven by institutional adoption.

Stock-to-Flow (S2F) Model

• Concept: The S2F model quantifies scarcity by dividing the existing supply (“stock”) by the annual production (“flow”). Historically, Bitcoin’s price has shown a strong correlation with its S2F ratio.
• Current Stock (Approx.): 19.7 Million BTC
• Annual Flow (Post-Halving): 273,750 BTC/year
• Current S2F Ratio: ~71.96 (19,700,000 BTC / 273,750 BTC)
• Implication: A higher S2F ratio indicates greater scarcity, which the model correlates with a higher market value. The post-halving S2F ratio aligns with historical levels that have preceded significant price appreciation. The model suggests further upside from current levels as Bitcoin’s scarcity continues to increase.

Network Value to Transaction (NVT) Ratio

• Concept: Analogous to a traditional equity’s P/E ratio, NVT divides Bitcoin’s market capitalization by its daily on-chain transaction volume. It assesses whether the network value is justified by its utility.
• Qualitative Assessment: While not providing a direct target price, the NVT ratio offers insights into market sentiment. Periods of rapid price growth without a proportional increase in transaction volume can indicate overextension (high NVT), while low NVT can signal undervaluation. With increasing institutional adoption, we anticipate both higher market capitalization and an eventual increase in underlying transaction utility (direct on-chain transactions and Layer 2 usage). Bitcoin’s current NVT is within a range historically seen during growth phases, suggesting fundamental utility is supporting, or poised to support, market cap expansion.

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 of the system (n^2).
• Qualitative Assessment: For Bitcoin, increasing adoption of wallets, exchanges, institutional investment products (like ETFs), and integrations within payment systems all contribute to a strengthening network effect. As more individuals and institutions hold, use, and build upon Bitcoin, its utility and security grow exponentially, reinforcing its intrinsic value. The institutional embrace significantly expands the “n” in Metcalfe’s Law for Bitcoin.

Target Price Derivation

Our €98,000 12-month target for BTC_EUR factors in:

• The historical precedent of post-halving bull cycles, typically lasting 12-18 months.
• The demand shock from unprecedented institutional inflows via spot ETFs, which are still in their early phases of adoption by larger wealth managers and institutions.
• Bitcoin’s maturing narrative as a global, digital store of value and an uncorrelated asset in a volatile macro environment.
• An expected increase in S2F premium as supply continues to tighten.

Key Risks

1. Regulatory Headwinds: Evolving and potentially restrictive global regulations (e.g., KYC/AML, tax treatment, environmental concerns) could impact Bitcoin’s adoption, exchange liquidity, or mining operations.
2. Market Volatility: Bitcoin remains a highly volatile asset. Significant price swings, including sharp corrections, are inherent to the asset class and can result in substantial capital loss.
3. Macroeconomic Deterioration: A severe global economic downturn, higher-for-longer interest rates, or a flight to traditional safe-haven assets could dampen risk appetite for Bitcoin.
4. Technological Risks: While Bitcoin’s core protocol is robust, potential future advancements in quantum computing pose a long-term theoretical risk to its cryptographic security. Any significant bug or vulnerability discovery, though highly unlikely, could severely impact trust.
5. Environmental Concerns: Ongoing debate and potential regulatory pressure regarding Bitcoin’s energy consumption (Proof-of-Work) could lead to public backlash or increased operational costs for miners.
6. Competition: While Bitcoin’s position as “digital gold” is strong, the broader crypto market is highly competitive. New cryptocurrencies or blockchain technologies could emerge, though none currently threaten Bitcoin’s primary use case.

Appendix

Disclaimer

This report is an Initiation of Coverage on Bitcoin EUR (BTC_EUR) and reflects our current views. All opinions, estimates, and forecasts expressed herein are subject to change without notice. Investing in Bitcoin involves substantial risk, including the potential loss of principal. Investors should consult their financial advisors before making any investment decisions.

Methodology

Price targets and forecasts are based on a combination of fundamental analysis, historical cycle analysis (particularly around halvings), current market dynamics, and projected institutional demand. Valuation metrics such as Stock-to-Flow and Network Value to Transaction Ratio are used qualitatively and quantitatively to inform our assessment of Bitcoin’s intrinsic value and potential price trajectory. Circulating supply estimates are based on Bitcoin’s fixed issuance schedule.

AI-Generated Disclosure

This report has been generated by an Artificial Intelligence model based on the provided inputs and publicly available information up to the knowledge cut-off date. While efforts have been made to ensure accuracy and adherence to the requested format and style, this content should be reviewed by a human expert for critical financial decisions.

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