Bitwise forecasts bitcoin to outperform traditional assets over next 10 years amid declining volatility

Bitwise Asset Management expects bitcoin to be the best-performing major asset over the next 10 years, projecting a 28% compound annual growth rate and gradually declining volatility, according to a new memo previewing the firm’s forthcoming Long-Term Capital Market Assumptions for bitcoin.

The report, authored by CIO Matt Hougan, says the new 10-year framework is aimed at large platforms and professional allocators now treating bitcoin as a “core” portfolio consideration following last year’s launch of spot ETFs and their subsequent approvals on national account platforms.

He notes that Bitwise has received a dozen requests this year for long-term assumptions, after reporting zero such asks from 2017 through 2024. In Hougan’s view, this signals a shift in how institutions evaluate BTC and marks its transition from a fringe asset to a primary investment option.

While the full report will detail the quantitative work behind the forecast, the preview states that bitcoin’s projected returns, volatility, and correlations compare favorably to traditional asset classes on a forward-looking basis.

Bitwise characterizes bitcoin’s correlations as “low” versus major assets by the conventional definition, between −0.5 and 0.5, a feature many allocators prize for diversification.

The asset manager positions its new assumptions as analogous to the annual capital-markets outlooks large Wall Street houses use to set strategic allocations for stocks, bonds, real estate, and alternatives.

Hougan argues that similar guidance is now warranted for digital assets with the maturation of products like spot bitcoin ETFs, an asset class with over $146 billion in assets. Launched in January 2024, onchain holdings tied to BTC ETFs have amassed almost 7% of bitcoin’s 21 million supply, according to The Block’s data.

Corporate BTC treasuries, led by Strategy's 629,376 stack, have also accumulated over $80 billion in assets. These public firms have relied on capital markets, offering equity and convertibles, to finance massive bitcoin purchases.

Bitwise said it will publish the full Bitcoin Long-Term Capital Market Assumptions later this week, including methodology and side-by-side comparisons against forecasts from firms such as JPMorgan, PIMCO, BlackRock, and Vanguard for traditional asset classes.

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