Author: Matt Hougan, Chief Investment Officer at 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).
The report will predict Bitcoin's returns, volatility, and correlations for the next decade based on data.
At the end of this memo, I will share a summary of our research findings, but first, I want to tell a short story to illustrate why this report is so important.
Why long-term capital market expectations are crucial
Long-term capital market expectations play a crucial role in how institutional investors construct their portfolios.
Every year, major companies on Wall Street and leading asset management firms gather their top talent 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' portfolio construction, providing them with core forecasts to mix various assets to achieve specific return and risk objectives. 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 asked us 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
Twelve times may not seem like many, but it is 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 not yet approved Bitcoin exchange-traded funds (ETFs); 2) Professional investors largely viewed Bitcoin as a special, opportunistic investment. Now, the fact that they are beginning to inquire about long-term capital market expectations means their views have shifted: Bitcoin is no longer a one-off investment on the periphery of portfolios but is starting to be considered for the core.
Bitcoin's maturation into a truly institutional-grade asset class is not an overnight process. It requires hard-won progress in processes and infrastructure, along with the tireless efforts of many individuals. This process really began with the launch of spot Bitcoin ETFs in January 2024, gaining momentum earlier this year as these ETFs gradually received approval on national account platforms, and is accelerating as these platforms start including Bitcoin in their model portfolios.
But there is no doubt: all of this is happening and is being built brick by brick into reality.
What are Bitwise's research findings?
Alright, that's enough of an introduction. What do our research actually indicate?
I won't give everything away; you'll need to read the full report yourself. But I can reveal a little bit first.
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 compares our predictions with forecasts for other asset classes from companies like JPMorgan and BlackRock to provide context for our predictions.
2025 to 2035 forecast: Bitcoin's returns, volatility, and correlations with major asset classes
Source: Bitwise Asset Management
Bitcoin's return and volatility forecasts are developed by Bitwise. Predictions for other asset classes are averages derived from capital market reports by JPMorgan, PIMCO, BlackRock, and Vanguard, which may be based on different indices and date ranges.
The specific asset classes 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: MSCI US REIT 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 the quantitative and qualitative analysis supporting our data, feel free to read the full report.
You can register here to obtain the report and other future research outcomes from Bitwise: https://bitwiseinvestments.com/sign-up.
