Author: Matt Hougan, Chief Investment Officer of Bitwise; Compiled by: Golden Finance
Later this week, Bitwise will release an important new research report—the first (Bitwise Bitcoin Long-Term Capital Market Expectations).
This report will predict Bitcoin's returns, volatility, and correlation over the next decade based on data.
At the end of this memorandum, I will share a summary of our findings, but first, I want to tell a little story to illustrate why this report is so important.
Why long-term capital market expectations are crucial
Long-term capital market expectations play a key role in the process of institutional investors building their portfolios.
Each year, leading companies on Wall Street and top asset management firms gather their top talents and massive amounts of data to write in-depth reports predicting future returns for stocks, bonds, real estate, and private credit.
These reports form the basis for many institutional investors when constructing their portfolios, providing core predictions that allow them to mix various assets to achieve specific return and risk goals. They may be the most important and anticipated reports released by most companies each year.
Since 2017, Bitwise has been dedicated to helping professional investors seize opportunities in the cryptocurrency space. Here are the number of times large institutional investors have inquired about Bitcoin's long-term capital market expectations each year:
2017: 0 times
2018: 0 times
2019: 0 times
2020: 0 times
2021: 0 times
2022: 0 times
2023: 0 times
2024: 0 times
2025: 12 times
12 times may not sound like much, but it is actually significant: Most new requests come from large national account platforms that manage hundreds of billions or even trillions of dollars in assets. Multiply 12 by $500 billion, and you can understand the scale of the funds involved.
So, what has changed?
Before this year, we received zero requests for two reasons: 1) Most large platforms have yet to approve Bitcoin exchange-traded funds (ETFs); 2) Professional investors largely viewed Bitcoin as a unique, opportunistic investment. Now they are beginning to inquire about long-term capital market expectations, which signifies a shift in their perspective: Bitcoin is no longer a one-off investment on the periphery of portfolios but is beginning to be considered for inclusion in the core.
For Bitcoin to mature into a true institutional-grade asset class, it is not something that happens overnight. It requires hard-won progress in processes and infrastructure, as well as the relentless efforts of many individuals. This process truly began with the launch of the spot Bitcoin ETF in January 2024, gaining momentum this year as these ETFs gradually received approval on national account platforms, and it is accelerating as these platforms begin to incorporate Bitcoin into their model portfolios.
But there is no doubt: this is all happening and becoming a reality piece by piece.
What are the findings of Bitwise
Well, that’s enough of the introduction. What does our research actually indicate?
I won't give everything away; the full report will need to be read for details. But I can share a little bit upfront.
Through conservative analytical methods, we predict that over the next 10 years, Bitcoin will become the best-performing major asset globally, with a compound annual growth rate of 28.3%, and volatility will steadily decline (although still at a high level). The table below provides context to our predictions by comparing them with forecasts for other asset classes from companies like JPMorgan and BlackRock.
2025 to 2035 Forecast: Bitcoin's Returns, Volatility, and Correlation with Major Asset Classes
Source: Bitwise Asset Management
The return and volatility predictions for Bitcoin are made by Bitwise. Predictions for other asset classes are averages of estimates from capital market reports by JPMorgan, Pacific Investment Management Company (PIMCO), BlackRock, and Vanguard, which may be based on different indices and date ranges.
The specifics of each asset class are as follows: Bitcoin: Bitcoin spot price. Commodities: Deutsche Bank DBIQ Optimal Yield Diversified Commodity Index Total Return. Gold: Gold spot price. Hedge Funds: Bloomberg Macro Hedge Fund Index. Private Credit: Indxx Private Credit Index. Private Equity: S&P Listed Private Equity Total Return Index. Real Estate: Morgan Stanley Capital International US Real Estate Investment Trust Index Total Return. US Bonds: Bloomberg US Aggregate Bond Index. US Stocks: S&P 500 Total Return Index. Note: Traditionally, a correlation between -0.5 and 0.5 is defined as 'low' or 'no' correlation.
For more details and quantitative and qualitative analyses supporting our data, feel free to read the full report.
You can sign up here to receive this report and future research from Bitwise: https://bitwiseinvestments.com/sign-up.
