Bitwise Forecasts Bitcoin to Outperform Major Asset Classes
Bitwise Asset Management has released projections indicating that Bitcoin is poised to deliver the highest returns among major asset classes over the next decade. The firm anticipates a compound annual growth rate (CAGR) of 28% for Bitcoin, alongside decreasing volatility. This outlook is part of a broader trend where institutional investors are beginning to treat Bitcoin similarly to stocks and bonds in their portfolio allocations.
Growing Institutional Demand Shapes Market Dynamics
The report, penned by Bitwise’s Chief Investment Officer Matt Hougan, targets large platforms and professional allocators who increasingly view Bitcoin as a “core” portfolio consideration. Hougan notes that this shift has occurred following the widespread launch and approval of Bitcoin spot exchange-traded funds (ETFs), which have facilitated access for traditional retirement accounts and wealth management platforms.
There has been a marked increase in interest for long-term planning regarding Bitcoin investments. This year alone, Bitwise has received a dozen inquiries about long-term assumptions related to Bitcoin, a stark contrast to zero requests between 2017 and 2024. Hougan describes this moment as a pivotal point, asserting that institutions are evaluating Bitcoin with the same methodologies used for traditional assets.
Favorable Comparisons to Established Markets
While the complete report has yet to be unveiled, the current preview suggests that Bitcoin’s forecasted returns and volatility profile favorably compare to established asset classes. Bitwise emphasizes that Bitcoin’s correlations with other major assets remain “low,” ranging between -0.5 and 0.5, a quality many allocators value for diversification benefits.
Bitwise’s bullish stance on Bitcoin parallels forecasts issued by leading Wall Street firms such as JPMorgan, PIMCO, BlackRock, and Vanguard, aiding institutions in strategizing long-term asset allocations across various categories including equities, fixed income securities, real estate, and alternative investments. Hougan argues that similar insights are warranted for digital assets given their increasing maturity and integration into mainstream investment products.
Onchain Growth and Corporate Holdings Surge
Since their January 2024 launch, Bitcoin spot ETFs have surged in popularity. Onchain holdings associated with these ETFs have ballooned to nearly 7% of the fixed supply of 21 million Bitcoins, with assets under management exceeding $146 billion, according to data from The Block. Corporate treasuries have also expanded their Bitcoin exposure, led by MicroStrategy, which holds 629,376 BTC and has collectively amassed over $80 billion worth of Bitcoin among publicly listed companies.
These acquisitions have largely been financed through capital market activities, including stock and convertible debt issuances. Bitwise’s full report on long-term capital market assumptions for Bitcoin is expected to be released later this week, providing a comprehensive methodology and quantitative analysis, alongside direct comparisons with forecasts for traditional asset classes from top global asset managers.
This publication marks Bitwise’s endeavor to frame Bitcoin within the long-established analytical frameworks used to assess traditional investments. For institutions, it signifies a growing acceptance of Bitcoin not merely as a speculative play but as a legitimate allocation option with defined risk and return expectations.
