JPMorgan adds Bitcoin to long-term return assumptions
In short
JPMorgan Asset Management has added Bitcoin to its long-term return estimates for the first time. It expects 10% annualized returns over the next 10 years, but also 55% volatility.
That matters because the high swings may make Bitcoin less attractive than stocks or other investments. The report does not say when, or if, Bitcoin will be used in the firm’s main portfolio models.
What the reporting says
JPMorgan Asset Management introduced Bitcoin into its long-term capital market assumptions for the first time, forecasting 10% annualized returns over the next decade and 55% volatility. The firm said the volatility could weaken Bitcoin’s risk-adjusted appeal versus traditional investments, and it has not added Bitcoin to its main portfolio models. The report leaves open how much client portfolios, if any, will change.
Why it matters
JPMorgan Asset Management has for the first time added Bitcoin to its long-term capital market assumptions, with a forecast of 10% annualized returns over the next decade and 55% volatility. The firm said that volatility could hurt Bitcoin’s risk-adjusted appeal, and it has not included Bitcoin in its main portfolio models. The key unknown is whether this changes any real portfolio allocations.