Bitcoin Valuation in 2025: A Strategic Framework for Institutional Investors in an Evolving Asset Class
Year: 2025
Type: article
Abstract: This working paper presents a structured and forward-looking valuation model for Bitcoin, designed specifically for institutional investors. It integrates quantitative models like Stock-to-Flow, behavioral finance, macroeconomic correlations, and adoption metrics to frame Bitcoin not just as a speculative asset but as a potential institutional-grade portfolio component. The proposed three-pillar framework includes: Scarcity and Supply Models (e.g., S2F and halving cycles) Adoption and Utility Metrics (e.g., Lightning Network usage and network effects) Macro-Financial Integration (e.g., correlations with real yields and monetary policy) Simulation results from 2020 to 2025 show that a 3–5% Bitcoin allocation in traditional portfolios can improve Sharpe ratios and diversification. The paper also outlines key risks—regulatory, technical, and ESG-related—and discusses policy implications relevant to U.S. financial innovation. This research is framed as part of the author’s EB-2 NIW petition, showing contributions of substantial merit to the national interest through financial innovation, digital strategy, and institutional-grade investment insights.
Author: Lacida, Hanzel
Language: English
Subfield: Information Systems
Field: Computer Science
Domain: Physical Sciences
Open Access status: green
OpenAlex ID: W6968008205
FWCI:
Cites:
Cited by:
Related to: