JP Morgan’s asset management arm, JP Morgan Asset Management, projected that long-term Bitcoin earnings could reach 10-15% compounded annually, according to the 2027 edition of its Long-Term Capital Markets Assumptions. The report covers the following:
“It estimates returns, volatility (price fluctuation), and correlations between assets for over 200 asset classes, with over 90 researchers and portfolio managers involved in its creation. It is used as a premise for the company’s strategic asset allocation and customer-facing tools.”
Although Bitcoin beat REIT’s return of 8.2%, gold’s return of 5.5%, and US large-cap stocks of 7.5%, the volatility of 55% annually still outmatches the stocks’ 18% and gold’s 17.2%—the CIO of Bitwise echoed. The CIO announced that “once ignored, ridiculed, and opposed, [Bitcoin] is now part of JP Morgan’s long-term assumptions and is expected to be the highest-performing asset in the next decade.”
Externalities such as Federal Reserve / Treasury bond rates in the U.S., the oil crisis, cost-of-living expenses, and the general economy have all affected the performance of Bitcoin. For some moments, it fell as investors sought safe havens in other investments. In others, its rally was caused by the underperformance of other vehicles. The link between Bitcoin and external events is possible for its historical volatility—as it is now a recognized investment asset—and this has led to its annual volatility rating of 55%. That said, JP Morgan’s asset management arm has loosely tied these to its projections; the 10-15% return is “baseline”, according to the report.
Investing in cryptocurrency and Bitcoin, especially, does not guarantee returns or causality with events. It is only the observed previous historical events that have given JP Morgan’s conclusion in its report; future events may disrupt the projection, seen or unseen—and it is up to the investor to exercise due diligence, discipline, and adept trading strategies to navigate events.
The 10-15% return figure is with the special consideration of the volatility of the virtual asset; unlike the low volatility of gold, say, Bitcoin is subject—and has been subjected to—large price swings in the previous years. All said, however, Bitcoin, according to many insiders and analysts, remains the “gold standard” of cryptocurrency.
