J.P. Morgan Asset Management has projected that Bitcoin could deliver annual compounded returns of 10% over the next 10 to 15 years, exceeding its forecasts for U.S. large-cap stocks, gold and real estate investment trusts.
Summary
- JPMorgan Asset Management has included Bitcoin in its long-term market forecasts for the first time.
- The firm projects 10% annual compounded Bitcoin returns, above its expectations for U.S. stocks and gold.
- Bitcoin’s projected 55% annual volatility is far higher than the estimates for traditional investment assets.
- The bank has left Bitcoin outside its main portfolio allocation models because of unstable market correlations.
- Bitwise CIO Matt Hougan highlighted the forecast while acknowledging JPMorgan’s warnings about Bitcoin’s risks.
According to the firm’s 2027 Long-Term Capital Market Assumptions, Bitcoin has entered its long-term return analysis for the first time, although its volatility and changing relationships with other assets have kept it outside the main portfolio allocation models. The latest assumptions cover more than 200 asset classes and provide projections intended for strategic investment planning.
The forecast places Bitcoin’s compounded annual return at 10%, compared with 7.5% for U.S. large-cap stocks, 8.2% for U.S. real estate investment trusts and 5.5% for gold. JPMorgan assigned Bitcoin a separate arithmetic average annual return of 20.9% and an annualized volatility assumption of 55%.
The figures form part of a forward-looking investment model and do not guarantee Bitcoin will outperform any of those assets. The bank’s published outlook emphasizes the uncertainty surrounding cryptocurrency returns, even as it introduces a dedicated forecast for the world’s largest digital asset.
JPMorgan projects Bitcoin returns above major U.S. assets
Bitcoin’s inclusion in JPMorgan’s long-term assumptions is one of the additions to the firm’s 31st annual report, released on October 19.
The 2027 edition examines expected investment returns over a 10- to 15-year period. JPMorgan prepares these estimates to help institutional investors assess portfolio risks and compare the possible performance of different assets under a consistent forecasting framework.
Among the figures highlighted in the report, Bitcoin leads the selected assets in expected compounded returns. Its 10% projection is 2.5 percentage points above U.S. large-cap stocks and 4.5 percentage points above gold.
U.S. real estate investment trusts have a projected annual compounded return of 8.2%, placing them 1.8 percentage points below Bitcoin. The firm’s assumptions put U.S. small-cap stocks at 7.7%, according to the published comparison circulated by Bitwise chief investment officer Matt Hougan.
The forecasts for conventional assets remain positive, even though JPMorgan expects changes in global capital flows and economic policy to affect future investment returns. Its October 19 announcement projects a 7% annualized return for a traditional portfolio consisting of 60% stocks and 40% bonds.
The asset manager said its updated outlook takes account of productivity gains from artificial intelligence, corporate profitability and higher bond yields. It expects those factors to influence returns across both public and private markets over the coming decade.
Bitcoin’s forecast appears alongside traditional asset classes, but the company has not identified it as an appropriate allocation for every investor. The report treats the cryptocurrency’s potential gains and risk characteristics as separate considerations.
Bitcoin’s 55% volatility forecast exceeds stocks and gold
JPMorgan’s higher return estimate comes with a substantial volatility assumption.
The firm projects annualized Bitcoin volatility at 55%, compared with approximately 18% for U.S. large-cap equities and 17.2% for gold. Based on those figures, the Bitcoin volatility assumption is roughly three times the level assigned to either asset.
Volatility measures the size of price fluctuations around an investment’s expected return. A higher reading indicates that an asset’s actual performance may vary more substantially from its central forecast, including periods of significant losses.
The bank’s reported arithmetic average return estimate for Bitcoin stands at 20.9%, significantly above its compounded return assumption of 10%. The two measures describe different aspects of a modeled investment return and should not be interpreted as interchangeable forecasts.
An arithmetic return is the simple average of annual results. A compound return accounts for the effect of gains and losses occurring over multiple periods, making it more useful for estimating how an investment’s value may develop through time.
Large losses create a bigger difference between those measures because subsequent gains must recover the value already lost. JPMorgan’s separate figures are consistent with the importance of accounting for volatility when considering long-term Bitcoin returns.
To illustrate the effect of compounding, an investment growing at a constant 10% a year would become approximately 2.59 times its starting value after ten years. Over 15 years, it would reach roughly 4.18 times its initial value, assuming the stated rate held throughout.
Those calculations are mathematical examples, not projections of a smooth price path for Bitcoin. Actual annual returns would vary, and the modeled volatility indicates substantial uncertainty around any single compounded outcome.
JPMorgan excludes Bitcoin from its main portfolio allocation models
Despite publishing a Bitcoin return forecast, JPMorgan has not added the cryptocurrency to its main covariance matrices used for long-term portfolio construction.
In its official investment outlook, the firm explains that Bitcoin’s volatile performance and unstable correlations with conventional assets complicate its inclusion in strategic portfolios. Instead, the report contains a separate, smaller covariance matrix examining Bitcoin alongside selected public-market assets.
A covariance matrix measures how investment returns move in relation to one another. Portfolio managers use such estimates when assessing whether combining different assets may alter the risk and return characteristics of a portfolio.
The challenge identified by JPMorgan is that Bitcoin’s relationship with stocks, bonds and other investments can change over time. Such variation complicates assumptions about how reliably the cryptocurrency would diversify a traditional investment portfolio during periods of market stress.
Its report cautions against assuming that concerns about the U.S. dollar will necessarily cause investors to move into cryptocurrency. The asset manager states that Bitcoin’s volatility and uncertain correlations remain obstacles to widespread inclusion in institutional portfolios.
The decision is distinct from excluding Bitcoin entirely from research. JPMorgan has introduced a long-term return estimate while preserving a separate framework for evaluating its risk and correlation characteristics.
Earlier, crypto.news covered JPMorgan’s Bitcoin outlook in July, when the bank pointed to institutional futures demand and Strategy’s growing cash reserves as supportive developments for the cryptocurrency. That research concerned market conditions and treasury financing, while the new report models expected returns over a much longer horizon.
The firm’s June review of Bitcoin treasury risks examined dividend obligations at Strategy and potential pressure on its dollar reserves. Those company-specific risks are separate from JPMorgan Asset Management’s latest asset-class assumptions.
Bitwise CIO highlights Bitcoin’s long-term return estimate
Matt Hougan, chief investment officer at Bitwise, drew attention to Bitcoin’s inclusion in JPMorgan’s long-term forecasts on October 20.
In a post on X, Hougan described the bank’s decision as a notable development in the way large financial institutions evaluate cryptocurrencies. He pointed to Bitcoin’s expected performance relative to other asset classes while acknowledging the limits set out in the report.
Hougan wrote that JPMorgan had included Bitcoin in its capital market assumptions and projected it would be the best-performing asset over the next decade. His comments represent his interpretation of the forecast, not a guarantee made by the asset manager.
He subsequently acknowledged that JPMorgan included several qualifications and described Bitcoin as an asset that is still maturing. The firm’s separate treatment of Bitcoin in its portfolio models is consistent with those qualifications.
Bitwise manages cryptocurrency investment products and has a commercial interest in the continued development of the digital asset market. Hougan’s response therefore comes from an industry participant whose business is connected to cryptocurrency investing.
JPMorgan’s official materials do not make a specific recommendation that investors allocate a fixed percentage of their portfolios to Bitcoin. Its 2027 assumptions are intended to support long-term planning and are not designed as short-term trading signals.
JPMorgan expects traditional portfolios to return 7% annually
Alongside its new Bitcoin research, JPMorgan revised its outlook for conventional investment portfolios.
The asset manager projects annual returns of 7% for a U.S. dollar-denominated portfolio invested 60% in equities and 40% in bonds over the next 10 to 15 years. Its latest assumptions put global aggregate bond returns at approximately 5.3%, the highest forecast for that category in two decades.
The company expects a portfolio that allocates 30% to certain alternative assets to potentially earn up to 7.5% annually, depending on its composition. It estimates that such allocations could improve the portfolio’s risk-adjusted return under the assumptions used in the report.
JPMorgan attributes its equity outlook partly to expectations of stronger corporate profitability and productivity gains associated with technology investment. It raised its U.S. large-cap equity return forecast by 0.8 percentage points compared with the previous edition.
The report’s estimates are based on market conditions and assumptions available through September 30, 2026. J.P. Morgan Asset Management says the forecasts are updated annually and are intended for long-term strategic allocations, not forecasts of next year’s market performance.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
