Key Takeaways
- • JPMorgan's 2027 Long-Term Capital Market Assumptions report projects a base-case annualized return of 10% for bitcoin over the next decade, ahead of its forecasts for U.S. bonds, large-cap and small-cap equities, and gold.
- • The bank's bitcoin range runs from a bear case of -9.7% annually to a bull case of 17% annually, the first time JPMorgan has published a range for bitcoin returns in its research.
- • JPMorgan's projections for comparison assets are 5.6%-6.6% for U.S. bonds, 7.5% for U.S. large-cap equities, 7.7% for U.S. small-cap equities, and 5.5% for gold.
- • Despite the return forecast, JPMorgan characterizes bitcoin as a speculative asset and does not position it as a portfolio diversifier, citing volatility and unstable correlations as obstacles to broad portfolio inclusion.
Summary
JPMorgan forecasts a base-case annualized return of 10% for bitcoin over the next 10 years, according to its 2027 Long-Term Capital Market Assumptions report released on Tuesday, as reported by CoinDesk. The projection exceeds the bank's expectations for U.S. stocks, bonds and gold over the same period. The report projects 5.6%-6.6% annual growth for U.S. bonds, 7.5% for U.S. large-cap equities, 7.7% for U.S. small-cap equities and 5.5% for gold.
The bank's bitcoin outlook spans a bear case of a 9.7% annual loss to a bull case of a 17% annual gain. The report marks the first time JPMorgan has published a range for bitcoin returns in its long-term research.
The forecast comes with notable caveats. JPMorgan describes bitcoin as a speculative asset and a hedge against monetary easing, and states that its "volatility and unstable correlation to other asset classes" remain an obstacle to widespread inclusion in portfolios. Portfolio manager Dr Sheena Shah and head of digital asset strategy Dennis Cristallo wrote that bitcoin "lacks a strategic role in portfolios other than as a bet on fiat currency expansion or future asset trading on blockchains." They noted that bitcoin "mostly trades like a high beta risk asset that tracks global money supply growth," though it is sometimes treated as "digital gold."
The analysts also flagged modeling challenges, noting that bitcoin's fundamentals are not cash flows and that its economics may depend as much on adoption, regulation and liquidity as on technology.
The view contrasts with the bank's public history on the asset. CEO Jamie Dimon described bitcoin as a "fraud" in 2017, a skeptical position he has reiterated with softer language in recent years, according to CoinDesk.
The bank's bitcoin outlook spans a bear case of a 9.7% annual loss to a bull case of a 17% annual gain. The report marks the first time JPMorgan has published a range for bitcoin returns in its long-term research.
The forecast comes with notable caveats. JPMorgan describes bitcoin as a speculative asset and a hedge against monetary easing, and states that its "volatility and unstable correlation to other asset classes" remain an obstacle to widespread inclusion in portfolios. Portfolio manager Dr Sheena Shah and head of digital asset strategy Dennis Cristallo wrote that bitcoin "lacks a strategic role in portfolios other than as a bet on fiat currency expansion or future asset trading on blockchains." They noted that bitcoin "mostly trades like a high beta risk asset that tracks global money supply growth," though it is sometimes treated as "digital gold."
The analysts also flagged modeling challenges, noting that bitcoin's fundamentals are not cash flows and that its economics may depend as much on adoption, regulation and liquidity as on technology.
The view contrasts with the bank's public history on the asset. CEO Jamie Dimon described bitcoin as a "fraud" in 2017, a skeptical position he has reiterated with softer language in recent years, according to CoinDesk.
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