From Decrypt · By Decrypt Staff
In brief
J.P. Morgan Asset Management projected a 10% compound annual return for Bitcoin over 10 to 15 years, its first long-term forecast for the asset.
That tops its forecasts for U.S. large-cap stocks (7.5%) and gold (5.5%), but comes with 55% annualized volatility.
The firm left Bitcoin out of its main portfolio models, citing volatility and unstable correlations, and called the currency debasement bull case “wide of the mark.”
Bitcoin just earned a spot in one of Wall Street’s most closely watched return forecasts, and it landed at the top of the table.
J.P. Morgan Asset Management projected a 10% compound annual return for Bitcoin over the next 10 to 15 years in its 2027 Long-Term Capital Market Assumptions, released Monday.
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It’s the 31st annual edition of the report and the first to include Bitcoin. The forecast tops the firm’s projections for U.S. large-cap stocks at 7.5%, gold at 5.5% and a classic 60/40 stock-bond portfolio at 7%.
The catch is volatility. The report pegs Bitcoin’s annualized volatility at 55%, compared with about 17% for gold. That’s why Bitcoin’s arithmetic average return, a simple average of yearly gains, comes in at 20.9%, more than double the compound figure investors would actually keep after big price swings.
The firm stopped short of adding Bitcoin to the models it uses to map how assets move together. “For the first time, we put a range on bitcoin returns, though we do not yet include bitcoin in our main covariance matrices,” the report says. Instead, JPMorgan built a separate, smaller matrix comparing Bitcoin with a subset of assets, citing the cryptocurrency’s volatility and unstable correlations as obstacles to widespread portfolio inclusion.
BitcoinBTC · USD$82,922−0.73%Oct 13Oct 15Oct 17Oct 19Oct 20$83.7k$82.6k$81.4k$80.2k24h HighHigh$83,24924h LowLow$81,155VolVol$1.1BMarket projectionsOdds by MyriadThis weekAbove $82,000Above $82k64% chance→Buy Bitcoin with USDTPowered by JupiterPrice data by CoinGeckoCoinGeckoMore Bitcoin news and projections →JPMorgan also pushed back on a popular bull case, calling the idea that currency debasement will spark a rush into crypto “wide of the mark.”
Bitwise Chief Investment Officer Matt Hougan welcomed the forecast, if not every input. “First they ignore you, then they laugh at you, then they fight at you, then they add you to their Long-Term Capital Markets Assumptions paper and predict you’ll be the best-performing asset of the next decade,” he wrote on X.
First they ignore you, then they laugh at you, then they fight at you, then they add you to their Long-Term Capital Markets Assumptions paper and predict you'll be the best-performing asset of the next decade. pic.twitter.com/TuOuH51l3c