TLDR
- Bitwise forecasts 28% annual return for bitcoin over the next decade.
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Institutional interest in bitcoin is growing, with 12 long-term requests in 2025.
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Bitcoin’s volatility is expected to decline, improving its attractiveness for investors.
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Bitwise compares bitcoin to traditional assets like stocks, bonds, and real estate.
Bitwise Asset Management has projected that bitcoin will outperform traditional assets over the next decade, estimating a 28% compound annual growth rate (CAGR). This forecast, included in a preview of the firm’s upcoming Long-Term Capital Market Assumptions report, highlights the potential for bitcoin to continue growing as a core investment asset.
The report, written by Bitwise’s Chief Investment Officer, Matt Hougan, emphasizes the growing institutional interest in bitcoin. According to Hougan, large platforms and professional investors are now considering bitcoin as a core portfolio component, particularly after the launch of spot bitcoin exchange-traded funds (ETFs) and their approval on national account platforms. This shift, he suggests, marks the transition of bitcoin from a niche asset to a mainstream investment.
Bitwise Breakdown of Declining Volatility and Bitcoin’s Institutional Adoption
Bitwise’s forecast also highlights that while Bitcoin’s volatility remains high, it is expected to gradually decrease over time. This trend would make Bitcoin more attractive to institutional investors seeking exposure to the digital asset while managing risk.
Institutional demand for Bitcoin has surged in 2025. Bitwise reported receiving a dozen requests for long-term assumptions this year, a significant increase from the zero requests between 2017 and 2024. The firm attributes this to the maturation of the Bitcoin market and growing confidence among institutional investors, particularly after the spot bitcoin ETFs became more widely available.
These ETFs have helped institutional investors gain easier access to bitcoin while reducing some of the risks associated with directly owning the cryptocurrency. As of January 2024, on-chain holdings tied to bitcoin ETFs had accumulated nearly 7% of Bitcoin’s total supply.
Bitcoin’s Low Correlation with Traditional Assets
Bitcoin’s potential as an investment option is also enhanced by its low correlation with traditional asset classes. Bitwise characterizes Bitcoin’s correlation to major assets, such as stocks, bonds, and real estate, as being between -0.5 and 0.5.
This low correlation allows Bitcoin to serve as a diversification tool for investors who are looking to balance the risk in their portfolios.
This feature makes Bitcoin an appealing option for those looking to hedge against market volatility in traditional assets. For large institutional allocators, such low correlation may provide a way to improve portfolio diversification, further driving demand for the digital currency.
Shift in Investment Strategies: Bitcoin as a Core Asset
With over $146 billion invested in Bitcoin ETFs as of 2025, the asset class has gained significant traction within the investment community. Corporate treasuries, including those from major firms, have also added bitcoin to their balance sheets. These public companies have accumulated billions of dollars in bitcoin through equity and convertible offerings, further cementing the digital asset’s role in mainstream financial markets.
Bitwise is positioning its new Long-Term Capital Market Assumptions report as part of a broader shift in how financial institutions plan their asset allocations. Just as major Wall Street firms use capital-market outlooks to set strategies for stocks, bonds, and real estate, Bitwise sees a similar need for digital assets like bitcoin. This growing interest reflects the broader institutional adoption of bitcoin as a key asset class.
Bitwise’s upcoming full report will include a comparison of its bitcoin forecast with those from other large financial institutions such as JPMorgan, PIMCO, BlackRock, and Vanguard. This side-by-side comparison will provide further insights into how Bitcoin stacks up against traditional assets in terms of return expectations, volatility, and correlations.
