As crypto markets continue to attract long-term institutional interest, Bitwise Asset Management has shared a striking prediction. A new report, authored by the company's chief investment officer (CIO), Matt Hougan, suggests that Bitcoin could deliver an average annual compound return of 28% over the next 10 years.
According to Bitwise's new report, "Bitcoin Long-Term Capital Markets Assumptions," BTC will still experience high volatility, although its volatility will decrease over time. However, it will continue to exhibit low correlation compared to other major asset classes. According to Hougan, this makes Bitcoin both an attractive source of returns and a diversifier for traditional investment portfolios.
Record Increase in Institutional Demand
Bitwise reports that demand for long-term Bitcoin assumptions is rapidly increasing. The company notes that it has received no such requests from 2017 to 2024, and that this year alone, it has received official requests for long-term forecasts from 12 different platforms. This trend is considered a signal that institutional investors are now viewing Bitcoin as a "central" portfolio element.
Hougan states that the approval of spot Bitcoin ETFs in 2024 played a critical role in this transformation. The launch of spot ETFs on national platforms in the US accelerated BTC's evolution from a "niche" asset to a "primary" investment option in the investment world.
The Bitwise report notes that Bitcoin's correlation with other major asset classes remains "low." This correlation, measured by definition between -0.5 and 0.5, is particularly advantageous for institutional investors in portfolio diversification.
The report offers a similar approach to the long-term market forecasts published annually by leading Wall Street institutions (such as JPMorgan, BlackRock, Vanguard, and PIMCO). However, this time, the focus is on the increasingly mature digital asset markets, and Bitcoin in particular.
ETFs and corporate treasuries are gaining prominence
Spot Bitcoin ETFs, launched in January 2024, currently manage over $146 billion in assets. On-chain data shows that these ETFs hold approximately 7% of Bitcoin's 21 million token supply.
Institutional firms have also become significant players in this process. Publicly traded companies, led by MicroStrategy, hold over $80 billion in Bitcoin. MicroStrategy alone holds over 629,000 BTC. Most of these purchases were financed through equity issuances or bond-like instruments obtained from the companies' capital markets.
Bitwise's message: Bitcoin is now mainstream
Bitwise will publicly release its long-term market assumptions for Bitcoin this week. In addition to its methodology and data, it will also include side-by-side comparisons with reports from major financial institutions on traditional asset classes.
