J.P. Morgan Asset Management put a return range on bitcoin for the first time in its 2027 Long-Term Capital Market Assumptions (LTCMA), and its 10% annual estimate tops every stock, bond and gold forecast in the table.
Key Takeaways
- J.P. Morgan’s 2027 LTCMA, released Oct. 19, projects a 10% compound annual return for bitcoin.
- The bank pegs bitcoin’s volatility at 55% versus 17.2% for gold, which it expects to return 5.5%.
- Bitwise CIO Matt Hougan says the forecast likely overstates volatility and understates bitcoin’s returns.
What Did JPMorgan Analysts Say on Record
The LTCMA is J.P. Morgan Asset Management’s yearly 10-15 year return outlook for more than 200 asset classes. The 2027 version, its 31st edition, came out yesterday and its landing page lists “a first look at bitcoin” among the highlights, saying the bank has now “put a range on bitcoin returns.”
Bitwise Chief Investment Officer Matt Hougan took to X following the release and posted the following comment:
First they ignore you, then they laugh at you… then they add you to their Long-Term Capital Markets Assumptions paper and predict you’ll be the best-performing asset of the next decade.
How Does 10% Compare?
Listed below are the assets highlighted in the JPMorgan report (using compound annual returns):
- Bitcoin: 10.0%, with 55% annualized volatility
- U.S. REITs: 8.2%
- U.S. small cap: 7.7%
- U.S. large cap: 7.5%, up from 6.7% last year, per the bank’s release
- U.S. high yield bonds: 6.6%
- Gold: 5.5%, with 17.2% volatility
- U.S. cash: 3.2%
Even private equity, which the release pegs at 9.8%, falls just short. A classic 60/40 stock-bond portfolio is projected to earn 7.0% a year.
Bitcoin’s price sits near $81,900 currently and compounding that at 10% a year gives about $212,500 in 10 years and roughly $342,000 by the far end of JPMorgan’s 15-year window. That is Bitcoin.com News’ arithmetic, not a target from the bank.
However, it’s also more modest than many crypto forecasts, including Hougan’s own argument that bitcoin could reach a $30 trillion market cap like gold.
Wait, There’s a Catch!
First, the release says plainly that “bitcoin is not included as an allocation.” JPMorgan has put a return range on the asset, but its model portfolios don’t hold any.
Second, the volatility number is doing a lot of work. JPMorgan’s table shows a 20.9% arithmetic return but only a 10.0% compound return. The gap is volatility drag: with 55% annual swings, a smooth average overstates what a holder actually ends up with.
Third, the landing page notes bitcoin isn’t yet part of the firm’s main correlation data. That means the bank can’t yet say how bitcoin fits alongside everything else in a portfolio.
Why Does Hougan Think It’s Too Conservative?
Hougan seems to agree with the ranking but not the inputs, as he believes JPMorgan’s volatility assumption is too high and its return assumption too low. In other words, he thinks the bank’s model makes bitcoin look both riskier and less rewarding than it is.
The timing gives his view some cover given that U.S. spot bitcoin exchange-traded funds (ETFs) took in $527 million yesterday, led by Blackrock’s IBIT. The week before, crypto ETFs had lost $593 million.
It also fits a broader shift at the bank, which just brought JPM Coin to Ethereum. John Bilton, JPMorgan’s global head of strategic research for multi-asset solutions, described the outlook as a guide for “markets reshaped by economic nationalism.” Bitcoin now has its own line in that guide. The next step is whether it gets an allocation.