10 percent a year. That is the compound return J.P. Morgan Asset Management projects for bitcoin over ten years, in its first long-term forecast for the asset, published on 20 October in the 31st edition of its Long-Term Capital Market Assumptions report.
The bank assumes volatility of 55 percent. For comparison, it projects gold at 5.5 percent a year. CoinDesk’s headline says bitcoin tops stocks and bonds as well, though The Block’s account does not carry those figures. Put together, a 10 percent expected return with 55 percent volatility describes a path with large swings along the way.
The report is the firm’s first long-term return forecast for bitcoin, so there is no earlier edition to compare the 10 percent against.
The authors are cautious about the asset itself. Bitcoin is not part of the firm’s main models for how asset prices move together, so the analysts built a separate, smaller covariance matrix against a subset of assets.
They describe bitcoin’s volatility and unstable correlations as an obstacle to widespread inclusion in portfolios. They say they could revise the approach if volatility falls and correlations settle, particularly as regulation clarifies and liquidity improves.
Matt Hougan, chief investment officer of Bitwise, argues the 55 percent estimate is too high, pointing to bitcoin’s declining volatility over its 15 years. Volatility is also the input the report itself says would change its view.
A headline return and a carve-out from the main models sit side by side in one document. What the bank has not said is how large an allocation its own numbers would support.
