J.P. Morgan Asset Management has published its first 10-year return forecast for bitcoin. The forecast appears in the firm’s 31st annual Long-Term Capital Market Assumptions (LTCMA) report, according to The Block. The headline number is a 10% compounded annual return. The more important detail may be what comes with it: a 55% volatility estimate, and a decision to keep bitcoin out of the bank’s main covariance models.
Put simply, one of the largest asset managers on Wall Street now models bitcoin as a long-term asset class, but it does not yet treat it like the other assets in its core portfolio framework.
What the report says
The Block reports that the LTCMA projects a 10% compounded annual return for bitcoin over the next decade. For comparison, the same report projects a 5.5% return for gold. On expected return alone, JPMorgan’s assumptions favour bitcoin over gold by a wide margin.
The risk estimate is the counterweight. JPMorgan puts bitcoin’s volatility at 55%. That figure explains how the firm has handled the asset. Rather than adding BTC to its main covariance models, which set out how asset classes move relative to each other, JPMorgan built a separate, smaller covariance matrix that compares bitcoin with a subset of assets.
The report’s authors are direct about why. As quoted by The Block, JPMorgan analysts wrote: “The volatility and unstable correlation of assets like bitcoin (BTC) remain an obstacle to their widespread inclusion in portfolios… Nevertheless, we initiate a long-term return forecast for BTC this year [and] provide a separate, smaller covariance matrix with BTC against a subset of assets.”
The firm also said it may revise this approach as volatility falls and correlations stabilise, helped by clearer regulation, better liquidity, and improved price discovery. The current treatment is presented as provisional, not final.
Why an LTCMA number matters
Long-term capital market assumptions are not trading calls. Advisers and institutions around the world use them as inputs for strategic asset allocation, the long-horizon decisions about how much of a portfolio goes to equities, bonds, real assets and alternatives. An asset without a formal return assumption is hard to include in those frameworks. An asset with one is at least on the table.
That is why the inclusion matters more than the exact figure. Publishing a 10-year return assumption for bitcoin is a step toward BTC appearing in model portfolios. The separate covariance matrix shows that step has not been completed.
The report’s authors, Dr. Sheena Shah and Dennis Cristallo, described the shift in investor behaviour that led to the change. “Investors are nevertheless increasingly exploring crypto assets, supported by more defined regulation and growing infrastructure (e.g. exchange-traded funds, futures, publicly traded crypto companies, options, bank-grade custody and financing markets),” they wrote, as reported by The Block.
They also set out why bitcoin specifically was chosen: “With over 60 million coins and tokens, bitcoin is the anchor of the crypto ecosystem, offering transactional security, longevity, improving regulatory clarity and liquidity.”
The volatility debate
The 55% volatility estimate has already drawn pushback. Bitwise CIO Matt Hougan welcomed the forecast but argued that the volatility estimate was too high, citing bitcoin’s declining volatility over the past 15 years, according to The Block.
This disagreement matters. In portfolio construction, volatility and correlation assumptions shape allocation sizes as much as expected returns do. A high volatility figure combined with unstable correlations keeps an asset’s suggested weight small, or keeps it in a separate bucket entirely, which is what JPMorgan has done. If the firm later lowers its volatility estimate, as it has said it may when conditions change, the case for moving bitcoin into its main models would get stronger. If volatility stays high, the separate treatment is likely to remain.
The Block also reported broader reactions. Hougan, in comments relayed by The Block, framed the moment this way: “First they ignore you, then they laugh at you, then they fight 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.” Strategy’s Michael Saylor was quoted by The Block as saying: “Wall Street is doing the math.”
These reactions come from long-time bitcoin advocates and should be read that way. JPMorgan’s own wording is more cautious, and it pairs the return estimate with an explicit statement that volatility and correlation remain obstacles.
The flows backdrop
The forecast arrives during a period of strong institutional activity. JPMorgan analysts estimated earlier this month that about $50 billion has flowed into digital assets in 2026, The Block reported.
ETF data points the same way. On Monday, October 19, BlackRock’s spot bitcoin ETF, IBIT, took in $665 million, its largest single-day inflow since October 2025, per The Block. The Block’s daily newsletter puts IBIT’s assets under management above $65 billion and notes that BlackRock has filed for an “iShares Bitcoin Managed Protect ETF.”
That filing fits the theme of the JPMorgan report. A product built around managing downside suggests that issuers also see volatility as the main barrier for some investors, and are designing around it rather than ignoring it.
For market context, CoinDesk reported bitcoin hovering around $83,000 on October 21.
Legitimacy, with caveats
The JPMorgan report is best read as two statements at once.
The first is about legitimacy. A major asset manager has decided that bitcoin deserves a formal long-term return assumption alongside traditional asset classes, and it has explained that decision with reference to regulation, market infrastructure and liquidity. That is a change from treating crypto as outside the scope of mainstream portfolio planning.
The second is about limits. The firm has not placed bitcoin in its main covariance models. It estimates volatility at 55% and says unstable correlations remain an obstacle to widespread portfolio inclusion. The barrier is no longer whether bitcoin counts as an asset class. It is whether its risk can be modelled with enough confidence to sit beside stocks, bonds and gold in the same framework.
JPMorgan has said what would change its approach: lower volatility, more stable correlations, clearer regulation, and better liquidity and price discovery. Those are the measures to watch in future LTCMA editions. A 10% return assumption is a starting point, not an endorsement, and the firm’s own caveats are as much a part of the story as the headline number.
This article is for informational purposes only and does not constitute financial advice.