What is Bitcoin?
Bitcoin (BTC) is the world’s first and largest cryptocurrency by market capitalisation, invented in 2008 by the pseudonymous Satoshi Nakamoto. It operates on a decentralised, peer-to-peer network powered by blockchain technology — a public, immutable ledger that records every transaction.
Bitcoin introduced the concept of digital scarcity: its supply is hard-capped at 21 million coins, enforced by protocol. Approximately 20.04 million BTC are already in circulation (as of June 2026), with the remaining supply released gradually through the mining process until roughly the year 2140.
Key Characteristics
| Property | Detail |
|---|---|
| Ticker | BTC |
| Launched | January 3, 2009 |
| Max Supply | 21,000,000 BTC |
| Consensus | Proof of Work (SHA-256) |
| Block Time | ~10 minutes |
| Halving Cycle | Every 210,000 blocks (~4 years) |
| Last Halving | April 2024 (reward: 3.125 BTC/block) |
| Next Halving | ~2028 (reward: 1.5625 BTC/block) |
| Divisibility | 1 BTC = 100,000,000 satoshis |
Investment Thesis
Bull Case
- Digital gold narrative: Bitcoin is increasingly viewed as a hard, censorship-resistant store of value, similar to gold but with superior portability and verifiability.
- Institutional adoption: BlackRock, Fidelity, and other asset managers now offer Bitcoin ETFs, unlocking access for pension funds and institutional allocators.
- Halving supply shocks: Each halving cuts new supply issuance in half. Historically, bull markets have followed within 12–18 months of each halving event.
- Dollar debasement hedge: With global central banks expanding money supplies, Bitcoin’s fixed supply makes it an attractive hedge against monetary inflation.
- Lightning Network: Layer-2 solutions enable near-instant, low-fee micropayments, addressing Bitcoin’s throughput limitations for everyday transactions.
- Regulatory clarity: The approval of spot Bitcoin ETFs in the US (January 2024) marked a turning point in regulatory acceptance.
Bear Case
- Volatility risk: Bitcoin regularly experiences 40–80% drawdowns from peak to trough, making it unsuitable as short-term capital.
- Regulatory risk: Governments could impose restrictions on exchanges, mining, or self-custody, particularly in response to illicit use or energy concerns.
- Energy consumption: Proof of Work mining consumes significant electricity, attracting ESG criticism and potential regulatory scrutiny.
- Technological disruption: Quantum computing advances or algorithmic breakthroughs could theoretically compromise SHA-256 cryptography, though timeline is uncertain.
- Competing assets: Ethereum, Solana, and other smart-contract platforms offer additional utility, potentially drawing capital away from Bitcoin.
- No yield: Unlike equities or bonds, Bitcoin generates no cash flows, making valuation purely sentiment-driven.
On-Chain Fundamentals
| Metric | Value (Jun 2026) |
|---|---|
| Active Addresses (7d avg) | ~750,000 / day |
| Hash Rate | ~630 EH/s |
| Miner Revenue | ~$18M / day |
| NVT Ratio | ~55 (elevated) |
| MVRV Z-Score | ~0.8 (neutral) |
| Exchange Reserves | ~2.0M BTC (declining) |
| Long-Term Holder Supply | ~14.5M BTC (68.4%) |
| Short-Term Holder Supply | ~5.5M BTC (25.9%) |
Declining exchange reserves typically indicate accumulation (holders moving BTC to cold storage), a historically bullish signal.
Historical Halving Cycles
| Halving | Date | Block Reward | Price at Halving | Cycle ATH |
|---|---|---|---|---|
| 1st | Nov 2012 | 50 → 25 BTC | ~$12 | ~$1,150 |
| 2nd | Jul 2016 | 25 → 12.5 BTC | ~$650 | ~$20,000 |
| 3rd | May 2020 | 12.5 → 6.25 BTC | ~$8,500 | ~$69,000 |
| 4th | Apr 2024 | 6.25 → 3.125 BTC | ~$63,000 | ~$122,400 |
Risk Metrics (1-Year)
| Metric | Value |
|---|---|
| Annualised Volatility | ~68% |
| Max Drawdown (52-week) | ~51.4% |
| Sharpe Ratio (52-week) | ~-0.12 |
| Beta vs. S&P 500 | ~1.45 |
| Correlation with Gold | ~0.08 |
| Correlation with Nasdaq | ~0.42 |
Macro Context
Bitcoin’s price action in 2025–2026 has been shaped by several macro forces:
-
Post-halving cycle peak: After the April 2024 halving, Bitcoin surged to its all-time high of ~$124,750 in October 2025 before entering a corrective phase that has seen prices decline ~51% from the peak.
-
US ETF inflows then outflows: Spot Bitcoin ETFs accumulated over 900,000 BTC in 2024–2025, creating sustained demand pressure. However, 2026 has seen net outflows as macro conditions tightened.
-
Fed rate policy: The Federal Reserve maintained elevated rates through 2025 and into 2026, pressuring risk assets including Bitcoin through tighter liquidity.
-
Geopolitical demand: Bitcoin adoption accelerated in emerging markets facing currency crises (Argentina, Turkey, Nigeria), adding structural demand, though price has been weighed by broader risk-off sentiment.
-
Hash rate and miner dynamics: Hash rate peaked at ~630 EH/s in early 2026. The fourth halving (April 2024) reduced block rewards to 3.125 BTC, compressing miner margins significantly at current prices.
Position Sizing Guidance
| Portfolio Type | Suggested BTC Allocation |
|---|---|
| Conservative | 1–3% |
| Balanced | 3–7% |
| Growth-oriented | 5–15% |
| Crypto-native | 20–50% |
Bitcoin’s high volatility means even a small allocation can have a meaningful impact on portfolio variance. Dollar-cost averaging (DCA) reduces timing risk.
Price data is fetched via scripts/fetch_bitcoin_price.py using Yahoo Finance (BTC-USD). Run the script to refresh to the latest prices.