J.P. Morgan Asset Management has included Bitcoin in its long-term return forecasts for the first time, projecting that it will deliver a higher compound annual return than gold and U.S. large-cap stocks over the next 10–15 years.
According to Wu Blockchain, JPMorgan Chase’s investment arm set its expected compound annual return for Bitcoin at 10% under its 2027 Long-Term Capital Market Assumptions. This puts Bitcoin ahead of traditional investment assets in the forecasts it released.
How does Bitcoin compare with gold?
In the same set of forecasts, the expected compound annual return was 7.5% for U.S. large-cap stocks, 5.5% for gold, and 8.2% for U.S. real estate investment trusts.
The projected rate for Bitcoin is 4.5 percentage points higher than gold’s and 2.5 percentage points higher than that of U.S. large-cap stocks. The comparison reflects expectations for a 10–15-year investment period rather than a price target for a single year.
55% volatility alongside high return expectations
The firm estimated Bitcoin’s annualized volatility at 55%. This indicates that strong price swings may accompany its long-term return expectations.
The arithmetic annual return expectation in the forecast set is 20.9%. The arithmetic average represents the average of periodic returns, while compound return reflects the investment’s cumulative growth rate over time; the two rates therefore represent different calculation methods.
Bitwise Chief Investment Officer Matt Hougan interpreted these figures as a picture that places Bitcoin as the asset with the highest expected return over the next decade. JPMorgan’s inclusion of Bitcoin in these long-term forecasts for the first time also makes it possible to compare it directly with traditional assets, in addition to its price outlook.
Not investment advice.