Bitwise Asset Management is projecting that Bitcoin will yield an impressive 28% annual returns over the next decade, with diminishing volatility. This forecast reflects a significant shift in how institutional investors are approaching Bitcoin, now viewing it similarly to traditional assets such as stocks and bonds.
Institutional Demand Fuels Framework
In a recent memorandum, Matt Hougan, Bitwise’s Chief Investment Officer, highlighted this evolving perspective among institutional platforms and professional asset allocators. They are increasingly treating Bitcoin as a “core” portfolio consideration, following the widespread approval and launch of spot Bitcoin exchange-traded funds (ETFs). These developments have enabled traditional retirement accounts and wealth management platforms to embrace this asset class more fully.
The surge in long-term planning interest is noteworthy. Hougan revealed that Bitwise has received a dozen inquiries this year regarding long-term assumptions surrounding Bitcoin—an increase from zero in the previous seven years. He stated that this marks a pivotal moment where institutions are evaluating Bitcoin on par with equities, fixed income, and other traditional assets.
Favorable Comparisons with Traditional Markets
Although the comprehensive report has yet to be released, the initial insights suggest that Bitcoin’s expected returns, volatility profile, and correlations favorably compare with those of established asset classes. Bitwise identifies Bitcoin’s correlations with other major assets as “low,” ranging between -0.5 to 0.5, a trait that many asset allocators favor for diversification benefits.
Bitwise’s position on Bitcoin aligns with annual capital market forecasts from major Wall Street firms like JPMorgan, PIMCO, BlackRock, and Vanguard. These forecasts help institutions determine long-term strategic allocations among various asset classes, including equities, fixed income securities, real estate, and alternative investments. Hougan advocates that similar guidelines are now warranted for digital assets, illustrating their growing maturity and integration into mainstream investment products.
On-Chain Growth and Corporate Holdings
Since their inception in January 2024, spot Bitcoin ETFs have rapidly gained traction, with on-chain holdings tied to these ETFs representing nearly 7% of Bitcoin’s capped supply of 21 million. Assets under management have surpassed $146 billion, according to data from The Block. Furthermore, corporate treasuries have expanded their exposure significantly, with publicly traded companies—led by MicroStrategy, which holds 629,376 BTC—accumulating over $80 billion in Bitcoin.
These acquisitions have been largely financed through capital markets activities, including stock and convertible debt issuances. The full report from Bitwise on long-term capital market assumptions for Bitcoin is expected later this week. It promises to include detailed methodologies and quantitative analyses, providing side-by-side comparisons with forecasts for traditional asset classes from leading global asset managers.
For Bitwise, this publication signifies an effort to position Bitcoin within the same evaluative framework traditionally used for assessing conventional investments. It reflects a growing acceptance among institutions, viewing Bitcoin not merely as a speculative play but as a serious allocation option with well-defined expectations for risk and return.
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