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Author: Matt Hougan, Chief Investment Officer of Bitwise; Compiled by: Bitchain Vision
Later this week, Bitwise will release an important new research report – the first Bitwise Bitcoin Long-term Capital Market Expectations.
The report will be based on data to predict the return, volatility and correlation of Bitcoin over the next decade.
At the end of this memo, I will share a summary of our research results, but first, I want to tell a small story about why this report is so important.
Why long-term capital market expectations are crucial
Long-term capital market expectations play a key role in institutional investors building portfolios.
Every year, Wall Street’s major companies and leading asset management companies bring together their top talent and massive data to write in-depth reports to predict future returns for stocks, bonds, real estate and private credit.
These reports are the basis for many institutional investors to build portfolios, providing them with core forecasts so that they can mix various assets to achieve specific returns and risk goals.They are probably the most important and most anticipated reports released every year by most companies.
Since 2017, Bitwise has been committed to helping professional investors seize opportunities in the cryptocurrency space.Here are the times that large institutional investors ask 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
12 times may not sound like a lot, but it actually means a lot: Most of the 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 see how huge the money this involves.
So, what has changed?
The requests we received before this year were zero for two reasons: 1) Most large platforms have not approved Bitcoin exchange-traded funds (ETFs); 2) Most professional investors regard Bitcoin as a special, opportunistic investment.And now they are asking about long-term capital market expectations, the fact that their views have changed: Bitcoin is no longer a one-time investment at the edge of the portfolio, but is beginning to be considered in the core.
It is not possible to mature into a true institutional asset class.This requires hard-won progress in processes and infrastructure, as well as the unremitting efforts of many people.The process really started with the launch of spot Bitcoin ETFs in January 2024, and it was accelerating as these ETFs gradually gained approval on national account platforms earlier this year, and as these platforms began to incorporate Bitcoin into their model portfolios.
But there is no doubt that all this is happening and is becoming a reality brick by brick.
What are the results of Bitwise’s research
OK, that’s all I have to say about the opening remarks.What does our research actually show?
I won’t tell you the whole report, and you still have to read it yourself.But I can reveal a little first.
Through a conservative analytical approach, we predict that Bitcoin will be the best performing major asset in the world over the next 10 years, with a CAGR of 28.3% and a steady decline in volatility (although still at a high level).The table below makes our predictions more contextually referenced by comparing forecasts from other asset classes with companies such as JPMorgan and BlackRock.
2025-2035 Forecast: Return, Volatility, and Correlations of Bitcoin to Major Asset Classes
Source: Bitwise Asset Management
Bitcoin’s rate of return and volatility forecasts are formulated by Bitwise.Other assetsThe category forecasts are the average of estimates in capital market reports from JPMorgan, Pacific Investment Management Corporation (PIMCO), BlackRock and Vanguard, which may be based on different indices and date ranges.
The specific details of each asset category are as follows: Bitcoin: Bitcoin spot price.Commodity: Deutsche Bank DBIQ optimal return diversified commodity index total return.Gold: spot price of gold.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 U.S. Real Estate Investment Trust Total Return Index.US Bonds: Bloomberg US Comprehensive Bond Index.US Stocks: S&P 500 Total Return Index.Note: Traditionally, correlations between -0.5 and 0.5 are defined as “low” or “no” correlations.
For more details and support for quantitative and qualitative analysis of our data, please read the full report.
You can register here to obtain this report and other future research results from Bitwise: https://bitwiseinvestments.com/sign-up.
