Initiation of Coverage: Bitcoin EUR (BTC_EUR)

1. Key Data & Forecast Snapshot

Recommendation: BUY

12-Month Price Target: €67,071

We initiate coverage on Bitcoin EUR (BTC_EUR) with a BUY recommendation and a 12-month price target of €67,071. Our bullish outlook is driven by increasing institutional adoption, Bitcoin’s proven resilience as a decentralized store of value, and the supply-constraining impact of the recent halving event. While inherent volatility remains a factor, the long-term fundamentals support significant upside.

• Current Price (as of 2026-02-21): €53,657
• 24h Change: -2.91%
• Market Cap: €1,072,485,289,882
• 24h Volume: €42,758,931,578

12-Month Forecasts:

• Target Price: €67,071
  • Calculation: Current Price €53,657 * (1 + 0.25 growth) = €67,071.25 (rounded)
• Projected Market Cap: €1,340,606,612,353
  • Calculation: Current Market Cap €1,072,485,289,882 * (1 + 0.25 growth) = €1,340,606,612,352.88 (rounded)
• Projected 24h Volume: €49,172,771,315
  • Calculation: Current 24h Volume €42,758,931,578 * (1 + 0.15 growth) = €49,172,771,314.92 (rounded)

2. Investment Thesis

Bitcoin (BTC) represents a compelling long-term investment opportunity driven by its unique attributes as a digital, decentralized, and scarce asset. We believe the asset is at an inflection point, transitioning from a niche speculative instrument to a recognized global macro asset.

• Accelerated Institutional Adoption: The approval and success of spot Bitcoin ETFs in major markets have significantly broadened access for institutional capital, providing regulated and familiar investment vehicles. This trend is expected to continue, driving substantial inflows and price appreciation. (Source: CoinDesk, AInvest, MEXC)
• Digital Scarcity & Halving Cycles: Bitcoin’s finite supply of 21 million coins, coupled with its programmatic supply reduction events (halvings), creates inherent scarcity that contrasts sharply with fiat currencies. The recent halving event further restricts new supply, historically leading to upward price pressure over the subsequent 12-18 months.
• Inflation Hedge & Macro Diversifier: In an environment characterized by increasing global monetary expansion and geopolitical uncertainty, Bitcoin offers a compelling alternative store of value. Its uncorrelated nature with traditional assets, combined with its programmatic disinflationary schedule, positions it as a potential hedge against inflation and a portfolio diversifier.
• Robust Network Security & Decentralization: Bitcoin’s proof-of-work consensus mechanism ensures unparalleled network security and resilience against censorship or manipulation, critical attributes for a global monetary network. The decentralized nature mitigates single points of failure, enhancing its long-term viability.
• Evolving Ecosystem: Continuous development in Layer 2 solutions (e.g., Lightning Network) enhances Bitcoin’s utility for faster and cheaper transactions, expanding its practical applications beyond a pure store of value.

3. Investment Positives

1. Growing Institutional Embrace: Spot Bitcoin ETFs have opened floodgates for traditional finance. Major institutions are increasingly allocating capital, providing legitimacy and depth to the market. (Source: CoinDesk, MEXC News)
2. Unquestionable Scarcity & Hard Cap: With a finite supply of 21 million BTC, Bitcoin offers a predictable, disinflationary monetary policy. This contrasts with fiat currencies and positions it as a superior store of value over the long term. The recent halving further intensified this scarcity.
3. Decentralization & Censorship Resistance: Bitcoin operates on a distributed ledger maintained by a global network of nodes, making it highly resistant to central control or censorship. This fundamental characteristic underpins its value proposition as “sound money.”
4. Global Macro Hedge Potential: Bitcoin’s characteristics—decentralization, scarcity, and independence from any sovereign entity—make it an attractive hedge against currency debasement, inflation, and geopolitical instability.
5. Network Effects & Lindy Effect: With over a decade of continuous operation, a vast global user base, and growing infrastructure, Bitcoin benefits from strong network effects. Its continued existence strengthens its perceived reliability and longevity (Lindy Effect).
6. Technological Innovation & Layer 2 Solutions: Ongoing development around the Bitcoin protocol, particularly Layer 2 solutions like the Lightning Network, enhances its scalability and utility for micro-transactions, expanding its addressable market.

4. Competitive/Peer Analysis

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

• Store of Value: Both are recognized stores of value and inflation hedges.
  • Bitcoin: Digital, easily transferable globally, highly divisible, verifiable scarcity (21M cap). Offers superior portability and programmatic issuance.
  • Gold: Physical, tangible, historical precedent, limited supply. Suffers from storage costs, less divisibility, and challenges in verification and transfer.
• Scarcity:
  • Bitcoin: Fixed, verifiable supply schedule.
  • Gold: Supply is finite but unknown, subject to new discoveries and mining technology.
• Accessibility:
  • Bitcoin: 24/7 global markets, increasing institutional access via ETFs.
  • Gold: Traditionally traded during market hours, physical acquisition can be cumbersome.
• Volatility:
  • Bitcoin: Historically higher volatility.
  • Gold: Relatively lower volatility, more established asset class.
• Conclusion: Bitcoin is emerging as a “digital gold,” offering superior attributes for the digital age while sharing gold’s core function as a scarcity-driven store of value.

Bitcoin vs. Ethereum (Store of Value vs. Utility Network)

• Primary Function:
  • Bitcoin: Primarily a store of value and decentralized monetary network.
  • Ethereum: A decentralized platform for smart contracts and decentralized applications (dApps), powering DeFi, NFTs, and Web3. Its native token (ETH) is often seen as “digital oil” or “programmable money.”
• Consensus Mechanism:
  • Bitcoin: Proof-of-Work (PoW), optimized for security and decentralization, requiring significant energy consumption.
  • Ethereum: Transitioned to Proof-of-Stake (PoS), aiming for greater energy efficiency and scalability.
• Tokenomics:
  • Bitcoin: Fixed supply cap (21M BTC) with predictable issuance halvings. Disinflationary.
  • Ethereum: No fixed supply cap; issuance is dynamic, with ETH burning mechanisms making it deflationary under certain network conditions.
• Use Case:
  • Bitcoin: “Sound money,” inflation hedge, global reserve asset.
  • Ethereum: Foundation for a decentralized internet economy, enabling innovation in finance, gaming, identity, etc.
• Conclusion: Bitcoin and Ethereum are complementary rather than direct competitors. Bitcoin serves as the foundational, secure, and scarce monetary layer, while Ethereum provides the programmable infrastructure for a broader decentralized ecosystem. Investors may hold both for different exposure.

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

Bitcoin Price Trajectory:

• 2024E: €75,000 – €80,000
  • Assumption: Post-halving rally, continued institutional ETF inflows, and macro tailwinds. (Estimate based on general market consensus 2024)
• 2025E: €95,000 – €110,000
  • Assumption: Peak of bull cycle following halving, increased retail participation, further integration into financial products. (Estimate based on historical cycles and increasing adoption)
• 2026E: €80,000 – €90,000
  • Assumption: Potential consolidation or minor correction after the peak, followed by stabilization as market matures. (Estimate based on historical post-peak behavior)

Network & Ecosystem Assumptions:

• Institutional Adoption: Expect continued growth in spot ETF AUM, broader corporate treasury allocations, and increased adoption by wealth management firms.
• Regulatory Clarity: Anticipate clearer regulatory frameworks in major jurisdictions (EU, US) over the next 1-3 years, reducing uncertainty and fostering further investment.
• Network Growth: Forecast modest but consistent growth in active addresses and transaction count, driven by increasing utility and Layer 2 adoption.
• Hash Rate & Security: Continued increase in network hash rate, reflecting robust miner participation and further strengthening network security.
• Macro Environment: Assume sustained interest in alternative assets amidst ongoing concerns about inflation and sovereign debt, bolstering Bitcoin’s appeal.
• Technological Development: Ongoing enhancements to the Bitcoin protocol and Layer 2 solutions will improve scalability, user experience, and broader utility.

6. Valuation

Network Value to Transaction (NVT) Ratio

The NVT Ratio (Network Value / Daily Transaction Volume) is often considered the “P/E Ratio of Bitcoin.” It assesses whether Bitcoin’s market capitalization is justified by its transactional throughput.

• Formula: NVT Ratio = Market Capitalization / Daily Transaction Volume (in EUR)
• Interpretation:
  • A high NVT ratio suggests the network’s valuation is growing faster than its utility (transaction volume), potentially indicating overvaluation.
  • A low NVT ratio suggests the network’s utility is growing faster than its valuation, potentially indicating undervaluation.
• Application: While we do not have live transaction volume data in EUR to provide a precise current NVT, the ratio is a critical tool for assessing Bitcoin’s fundamental valuation over time. Analysts monitor its trend and compare it to historical averages to identify potential overbought or oversold conditions. For instance, a significantly elevated NVT ratio compared to its long-term average might signal a need for caution.

Stock-to-Flow (S2F) Model

The Stock-to-Flow model, popularized by “PlanB,” values Bitcoin based on its scarcity. It posits a relationship between the existing supply (“Stock”) and the annual new supply (“Flow”).

• Circulating Supply (estimated):
  • Calculation: Market Cap / Current Price = €1,072,485,289,882 / €53,657 = ~19,987,700 BTC
• Annual New Supply (Post-Halving):
  • Current Block Reward: 3.125 BTC (after April 2024 halving)
  • Blocks per Day (approx.): 144
  • Annual Supply: 3.125 BTC/block * 144 blocks/day * 365 days/year = ~164,250 BTC/year
• Current Stock-to-Flow Ratio:
  • Calculation: Circulating Supply / Annual New Supply = 19,987,700 BTC / 164,250 BTC/year = ~121.7
• Interpretation: A high S2F ratio indicates extreme scarcity. Historically, Bitcoin’s price has correlated with its S2F ratio, especially after halving events dramatically increase the ratio. An S2F of ~121.7 is exceptionally high, surpassing that of gold (~60), reinforcing Bitcoin’s status as an ultra-scarce asset. This model suggests significant long-term appreciation potential as scarcity increases.

Network Effects (Metcalfe’s Law)

Metcalfe’s Law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (V ~ n²). While not perfectly applicable to Bitcoin’s price, the principle of network effects is crucial.

• Growing User Base: As more individuals, institutions, and businesses adopt Bitcoin for transactions, savings, or investment, its utility and perceived value increase exponentially.
• Increased Security: A larger network of miners and nodes further decentralizes and secures the network, making it more robust against attacks.
• Liquidity & Integration: Broader adoption leads to increased liquidity across exchanges and greater integration into traditional financial systems, enhancing its accessibility and utility.
• Valuation Implication: The continuous expansion of Bitcoin’s user base and ecosystem integration drives its fundamental value proposition, as a network with more participants is inherently more valuable.

7. Key Risks

• Regulatory Intervention: Governments globally may impose stricter regulations, outright bans, or introduce competing central bank digital currencies (CBDCs), which could negatively impact Bitcoin’s adoption and price. (Source: Bloomberg – “Identity Crisis”)
• Technological Obsolescence & Competition: While Bitcoin has first-mover advantage and robust security, advancements in blockchain technology or the emergence of a superior digital asset could challenge its dominance.
• Market Volatility & Manipulation: Bitcoin markets are known for extreme price swings, driven by speculative trading, large institutional movements, and potential market manipulation (e.g., “whale” activity, leveraged trading). (Source: AInvest)
• Security Risks & Hacks: Although the Bitcoin protocol itself is highly secure, exchanges, wallets, and individual users remain susceptible to hacking, theft, and operational failures, leading to loss of funds.
• Environmental Concerns: The energy consumption of Bitcoin’s Proof-of-Work mining continues to draw criticism. Increasing environmental scrutiny could lead to regulatory pressure or negative public sentiment.
• Global Macroeconomic Headwinds: A significant global economic downturn or a flight to traditional safe-haven assets could temporarily reduce demand for riskier, volatile assets like Bitcoin.
• “Identity Crisis”: As highlighted by recent news, the debate around Bitcoin’s primary identity (store of value, payment system, speculative asset) creates uncertainty that can impact investor sentiment. (Source: Bloomberg – “Identity Crisis”)

8. Appendix

This report is an independent research product and has been prepared solely for informational purposes. The information provided herein is based on data obtained from publicly available sources and proprietary research, which are believed to be reliable but are not guaranteed as to accuracy or completeness. Opinions, estimates, and projections contained in this report constitute our judgment as of the date of this report and are subject to change without notice. This material is not an offer or solicitation to buy or sell any security or financial instrument. Investing in cryptocurrencies involves substantial risk, including the risk of total loss. Past performance is not indicative of future results.

Compliance Language: This report was generated by an AI model and is based on publicly available data and general market knowledge up to the specified date.

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