JPMorgan Asset Management includes Bitcoin in long-term assumptions for the first time: 10% annualized return over ten years, but 55% volatility becomes a concern.

JPMorgan Asset Management has included Bitcoin in its long-term capital market assumptions for the first time, projecting that its returns over the next decade could outperform stocks, bonds, and golda milestone seen as Bitcoin's acceptance on Wall Street. The problem, however, is that Bitcoin's extreme volatility could undermine its appeal on a risk-adjusted basis. JPMorgan Asset Management's base case projects a 10% annualized return for Bitcoin over the next decade, but simultaneously assumes annualized volatility as high as 55%, more than three times that of U.S. large-cap stocks. In its report this week, the firm said that because Bitcoin's correlation with other assets is unstable, it has not yet included it in its main portfolio models. High volatility erodes compound returns, because a larger gain is needed to recover from a significant loss. Bitcoin ETF investors are familiar with this: those who bought near Bitcoin's peak of just above $126,000 in 2025 saw their holdings at one point down as much as 50% as prices fell. The JPMorgan Asset Management team, including Tim Lintern, Thushka Maharaj, and Sean Daly, wrote: "We believe it is too early to view Bitcoin as a diversification tool in a balanced portfolio. But if volatility continues to decline and correlations with other assets stabilize, the situation could change in the future, especially as regulation becomes clearer and liquidity and price discovery continue to improve." Since the pandemic, several Wall Street institutions have stepped up their presence in crypto, moving from cautious inquiries to more substantive experimentation, including offering clients trading in certain coins, launching crypto-themed funds, and experimenting with tokenization. JPMorgan Asset Management analysts said that although many investors still view Bitcoin as a speculative asset, they are still exploring cryptocurrencies. Recent surveys show that one in ten clients say their portfolios hold cryptocurrencies, and about 17% say they plan to "prioritize crypto allocations." Part of the reason is that the regulatory framework has become more mature and clear. Nevertheless, the firm's researchers still say that because of "unstable correlations" with other assets, Bitcoin is not yet sufficient to serve as a diversification tool in a balanced portfolio. They wrote: "If correlations stabilize and volatility declines, Bitcoin's portfolio utility could improve in the future." More broadly, the researchers explored in the report how "economic nationalism, technology adoption, and capital reallocation" could drive asset returns over roughly the next decade. They concluded that governments will invest in "national resilience" and companies will race to deploy new innovations, and these factors will affect how capital is allocated. They said a $15 trillion "global capex supernova" will drive strong asset returns. The report said: "Technology adoption today is almost synonymous with artificial intelligence, but over the next decade, breakthroughs in other areasfrom medicine to Siasun Robot&Automation to spacecould also further support trend growth through investment and productivity."