Research Report: Bitcoin
Overview
Bitcoin (BTC) is the world’s first and most valuable decentralized digital currency, operating on a peer-to-peer network that enables censorship-resistant, borderless, and trustless value transfer. Introduced in 2009 by the pseudonymous creator Satoshi Nakamoto, Bitcoin established blockchain technology as a transformative financial architecture. It is widely regarded as digital gold—a store of value with a fixed supply of 21 million coins, governed by algorithmic monetary policy rather than centralized authority. Central to Bitcoin’s monetary design is its halving cycle, which reduces the block subsidy by 50% approximately every four years. This built-in scarcity mechanism has historically acted as a catalyst for bullish supply-demand dynamics and continues to anchor long-term investor interest. Introduced in 2009 by the pseudonymous creator Satoshi Nakamoto, Bitcoin established blockchain technology as a transformative financial architecture. It is widely regarded as digital gold—a store of value with a fixed supply of 21 million coins, governed by algorithmic monetary policy rather than centralized authority.
Source: Bitcoin Magazine
Market Position and Growth
As of mid-2025, Bitcoin maintains a dominant position in the cryptocurrency market with a total market capitalization exceeding $1.2 trillion. Institutional interest has surged following the approval of spot Bitcoin ETFs in the U.S., enabling broader access through retirement accounts and wealth management platforms. Bitcoin adoption continues to grow globally, with increased use in both developed and emerging markets as a hedge against inflation, currency devaluation, and political instability. On-chain activity and Lightning Network capacity have risen, supporting Bitcoin's use case as both a macro asset and medium of exchange.
Technological and Strategic Differentiators
Bitcoin’s most critical differentiator is its immutability and decentralization. It is secured by over 400 exahashes of proof-of-work mining power, making it the most secure blockchain in existence. The network's predictable issuance schedule, capped supply, and resistance to manipulation create a compelling monetary profile. Unlike smart contract platforms, Bitcoin focuses on simplicity and robustness. Recent advancements such as Taproot (enabling more efficient transactions and smart contract functionality) and increased Lightning Network usage are expanding its transactional utility while maintaining scalability and privacy.
Key Developments and Strategic Moves
The most significant recent development is the wide-scale adoption of spot Bitcoin ETFs by major asset managers including BlackRock, Fidelity, and Franklin Templeton. These vehicles have driven billions of dollars in net inflows, institutionalizing Bitcoin access and reducing barriers for traditional investors. On the policy front, Bitcoin has benefited from regulatory clarity relative to other crypto assets—it is widely acknowledged as a commodity in the U.S. and exempt from securities regulation. Meanwhile, geopolitical tensions and central bank dovish pivots have reinforced Bitcoin’s narrative as a non-sovereign, inflation-resistant asset.
Financial Performance
Bitcoin has delivered a strong performance in 2025, rising over 50% year-to-date as of June. This rally has been fueled by ETF demand, halving-related supply constraints, and growing retail participation in international markets. Bitcoin mining stocks have outperformed broader equity markets, reflecting renewed profitability post-halving. Network fundamentals remain robust, with record-high hash rates, active addresses, and long-term holder accumulation. Bitcoin's historical Sharpe ratio remains favorable compared to traditional assets, making it a diversifier in multi-asset portfolios.
Impressive growth
Although high volatility, Bitcoin's CAGR since its inception has been about 136%.
Risks and Challenges
Bitcoin remains subject to regulatory scrutiny, especially around mining operations and environmental impact. While U.S. federal regulators treat Bitcoin more favorably than other crypto assets, international policies vary widely. Price volatility, though declining over time, still poses challenges for short-term investors and institutions with strict risk mandates. Technological development on Bitcoin is slower than in other ecosystems due to its conservative governance model. Additionally, reliance on energy-intensive mining could face ESG pushback in certain jurisdictions.
Our View
Bitcoin continues to mature from a speculative asset into a globally recognized macro asset class. Institutional adoption, growing retail awareness, and robust infrastructure have positioned Bitcoin for continued relevance in the evolving financial system. Its transparent monetary policy, finite supply, and increasing integration into traditional finance enhance its appeal as both a hedge and long-duration store of value. While volatility and regulation remain factors to watch, we believe Bitcoin's risk-reward profile remains compelling, especially in an environment defined by fiat debasement, geopolitical tension, and digital transformation.
Further Reading
Glassnode On-Chain Reports
Fidelity Digital Assets: Bitcoin Investment Thesis
U.S. SEC Approval of Spot Bitcoin ETFs
Bitcoin Halving 2024: Economic and Market Implications