J.P. Morgan Asset Management expects Bitcoin to deliver average compounded annual returns of 10% over the next 10 to 15 years, putting its forecast above those for U.S. large-cap stocks, gold and real estate investment trusts.
The firm included Bitcoin in its long-term investment forecasts for the first time in its 2027 Long-Term Capital Market Assumptions, released on October 19. However, it continues to treat Bitcoin separately from traditional assets in its main portfolio allocation models because of its high volatility and changing relationship with other markets.
The forecast puts Bitcoin’s expected annual compounded 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.
J.P. Morgan also estimates Bitcoin’s annualized volatility at 55%, highlighting the substantial risks that come with its projected returns. The figures are long-term assumptions, not guarantees that Bitcoin will outperform traditional investments.
Bitcoin’s projected returns exceed major assets
J.P. Morgan’s 2027 report examines expected investment returns over a 10- to 15-year period. The estimates are designed to help institutional investors compare asset classes and plan long-term portfolios.
Among the assets highlighted in the report, Bitcoin has the highest projected compounded annual return. Its 10% forecast 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 an expected annual return of 8.2%, while U.S. small-cap stocks are projected to return 7.7%.
The asset manager also expects a traditional portfolio invested 60% in stocks and 40% in bonds to generate annual returns of around 7% over the next 10 to 15 years.
These estimates reflect J.P. Morgan’s assumptions about market conditions, corporate earnings, productivity and interest rates. Actual returns could differ significantly from the projections.
Bitcoin’s high volatility remains a major risk
J.P. Morgan’s expected Bitcoin return comes with a volatility estimate of 55% annually.
For comparison, the firm estimates annual volatility of around 18% for U.S. large-cap stocks and 17.2% for gold. Bitcoin’s projected volatility is therefore roughly three times as high.
Volatility measures how widely an asset’s returns fluctuate. Higher volatility means investors may experience much larger gains or losses than expected.
The report also lists Bitcoin’s arithmetic average annual return at 20.9%, compared with its 10% compounded annual return estimate. These figures measure returns differently and should not be treated as interchangeable.
Arithmetic returns are calculated by averaging annual results. Compounded returns account for how gains and losses affect an investment’s value over time. Large losses can reduce compounded returns because an investment must gain more to recover what it has lost.
For illustration, an investment growing at a steady 10% annually would become about 2.59 times its starting value after 10 years and 4.18 times its starting value after 15 years. Bitcoin’s actual returns would not follow such a smooth path, and its volatility makes the outcome uncertain.
Why J.P. Morgan still separates Bitcoin from traditional portfolios
Despite adding Bitcoin to its long-term return forecasts, J.P. Morgan has not included it in its main covariance matrices used for portfolio construction.
A covariance matrix measures how the returns of different assets move in relation to one another. Portfolio managers use it to estimate overall risk and determine whether combining investments could help diversify a portfolio.
J.P. Morgan says Bitcoin’s volatile performance and changing correlations with traditional assets make it difficult to include in standard long-term allocation models. The firm instead uses a separate, smaller framework to examine Bitcoin alongside selected public-market assets.
The report also warns against assuming that concerns about the U.S. dollar will automatically drive investors toward cryptocurrencies.
The decision does not mean the firm has excluded Bitcoin from its research. Instead, it has introduced a long-term return estimate while continuing to treat the cryptocurrency’s risk and diversification characteristics separately.
Bitwise CIO highlights the forecast
Matt Hougan, chief investment officer at Bitwise, drew attention to J.P. Morgan’s Bitcoin forecast in an October 20 post on X.
Hougan described Bitcoin’s inclusion in the firm’s long-term capital market assumptions as an important development. He highlighted its projected returns compared with other asset classes while acknowledging the bank’s warnings about volatility and portfolio risks.
His comments reflect his interpretation of the report, rather than a guarantee from J.P. Morgan that Bitcoin will be the best-performing investment over the coming decade.
Bitwise operates in the cryptocurrency investment market, so Hougan’s perspective comes from an industry participant with a direct connection to digital asset investing.
J.P. Morgan has not recommended a specific Bitcoin allocation for all investors. Its report is intended to support long-term investment planning rather than provide short-term trading signals.
J.P. Morgan expects traditional portfolios to return 7%
The report also updates the firm’s forecasts for conventional investments.
J.P. Morgan expects a portfolio holding 60% equities and 40% bonds to return around 7% annually over the next 10 to 15 years. It projects global aggregate bonds to return approximately 5.3%, the highest forecast for that category in two decades.
The firm estimates that some portfolios allocating 30% to alternative investments could achieve annual returns of up to 7.5%, depending on the assets selected and the assumptions used.
Its updated outlook reflects expectations of stronger corporate profitability, productivity gains from artificial intelligence and higher bond yields. The firm also raised its forecast for U.S. large-cap stocks by 0.8 percentage points compared with its previous edition.
Overall, J.P. Morgan’s latest assumptions recognize Bitcoin’s potential for higher long-term returns while emphasizing that its volatility and unpredictable relationship with other investments remain important risks. The forecasts are based on information available through September 30, 2026, and are intended for strategic planning, not predictions of next year’s market performance.