Bitcoin is considered a highly volatile and risky asset, and the extent to which it should be included in investment portfolios continues to be debated.
At this point, following 21Shares’ report, JPMorgan also published a study.
At this point, JPMorgan included Bitcoin in its 2027 Long-Term Capital Market Predictions, stating that Bitcoin could provide a 10% compound annual return over the next 10 years.
This ratio is higher than that of major US stocks and gold.
Bitcoin Outperforms Traditional Investments!
According to JPMorgan’s 2027 Long-Term Capital Markets Expectations report, Bitcoin’s annual compounded return is projected at 10%. This rate compares to 9.8% for private equity; 7.5% for large-cap US stocks; 7% for a 60/40 equity-bond portfolio; and 5.5% for smaller portfolios.
JPMorgan also added that Bitcoin’s correlation with US large-cap stocks is estimated at 33%.
Thus, Bitcoin stands out as the asset with the highest expected return among the investment instruments evaluated by the bank, highlighting BTC’s portfolio diversification potential.
While JPMorgan’s report attracted attention in the market, Grayscale’s head of research, Zach Pandl, also reviewed it. Pandl emphasized that Bitcoin is gaining more acceptance in the institutional investment world, but this does not mean its role in portfolios is definitively established.
“…The correlation between Bitcoin and large-cap US stocks is 33 percent. This is lower than that of foreign stocks, corporate bonds, and hedge funds. Because the degree of alignment with stocks is relatively small, there is room for diversified investment.”
*This is not investment advice.
