Bitwise Predicts Bitcoin to Outperform Traditional Assets over the Next 10 Years Despite Falling Volatility

Bitwise Asset Management has forecasted that Bitcoin (BTC) will be the top-performing major asset over the next ten years, predicting a 28% compound annual growth rate (CAGR) and decreasing volatility. The prediction was released in a sneak peek of the company's upcoming Bitcoin Long-Term Capital Market Assumptions report.

Institutions Basing Bitcoin as a Core Allocation

The report, which was written by Matt Hougan, Bitwise's Chief Investment Officer, points out that the framework is designed with big investment platforms and institutional allocators now embracing Bitcoin as a "core" portfolio holding.

Hougan reported that Bitwise has received more than a dozen institutional long-term Bitcoin assumption requests this year—a considerable jump from none between 2017 and 2024. According to him, this indicates a basic change in institutions' perception of BTC, moving away from speculation to become a mainstream investment choice.

Positive Comparison to Legacy Assets

Whereas the full report will feature in-depth quantitative analysis, the teaser suggests that Bitcoin's future returns, volatility, and correlations relative to traditional assets such as stocks, bonds, and real estate are on par.

Bitwise points out the "low" correlation of Bitcoin with large assets—between −0.5 and 0.5—a feature portfolio managers would relish from a diversification perspective.

Bitcoin ETFs and Corporate Treasuries Driving Growth

The memo also references the coming of age of digital assets with the rollout of spot Bitcoin ETFs, collectively having over $146 billion in assets under management since they entered the market in January 2024. These ETFs are currently holding close to 7% of Bitcoin's fixed supply of 21 million, per on-chain metrics.

Further, corporate Bitcoin balances, headed by Strategy's enormous 629,376 BTC pile, have amassed over $80 billion worth of assets. Several of these firms have used capital markets instruments like equity issuances and convertibles to fund big-time purchases of Bitcoin.

Outlook Versus Wall Street Benchmarks

Bitwise anchors its long-term hypotheses with the annual market prognostications issued by Wall Street behemoths JPMorgan, BlackRock, Vanguard, and PIMCO. Hougan contends that identical structured advice is now necessary for digital assets, considering institutional investment in products such as spot Bitcoin ETFs.

The complete report will come out later this week, offering elaborate methodology and side-by-side analysis of Bitcoin forecasts against traditional asset classes.

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