JPMorgan forecasts an annual return of 10% for bitcoin in the long term

The cryptocurrency market is reaching a new milestone in its recognition among major investors. In its projections for 2027, JPMorgan Asset Management assigns bitcoin a compound annual return of 10% over the long term. This estimate exceeds those of several traditional asset classes, notably U.S. equities and diversified portfolios. However, this outlook comes with significant risks, notably related to volatility and uncertainties surrounding the relationships between financial investments.

JPMorgan integrates bitcoin in its long-term return forecasts

On November 4, Zach Pandl, research director at Grayscale, commented on the integration of bitcoin into the investment assumptions of JPMorgan Asset Management for 2027. This development marks an important step in the institutional evaluation of cryptocurrencies. The study examines over 200 major asset classes and provides estimates for returns, volatility, and correlation. This data enables managers to compare different investments over a ten- to fifteen-year horizon.

According to the figures reported by Grayscale, JPMorgan forecasts a compound annual return of 10% for this asset. This estimate exceeds those of the other investment categories presented in the report. Large-cap U.S. equities show an expected return of 7.5%, while private equity reaches 9.8%. Meanwhile, a portfolio composed of 60% equities and 40% bonds predicts an annual return of 7%.

JPMorgan published its market assumptions on October 19, based on data as of September. The study covers more than 200 asset classes and adopts a ten- to fifteen-year horizon. It serves as a reference for investors defining their strategic allocations. The chart studied by Grayscale links forecasted returns with historical correlations measured as of September 30, 2026. It shows that bitcoin’s correlation with large U.S. equities reaches 33%.

Gold shows a lower correlation with large U.S. equities, but its expected annual return is 5.5%. This comparison allows distinguishing two important features for investors. An asset can help diversify a portfolio without necessarily offering the highest forecasted return. JPMorgan’s estimates thus place the cryptocurrency in a particular category. They highlight a potential for superior returns but also specific risk parameters.

Volatility complicates bitcoin’s role in a portfolio

Expected return alone is not enough to determine an asset’s place in an investment strategy. JPMorgan assumes an annualized volatility hypothesis of 55% for bitcoin. This level signifies potentially significant price fluctuations in financial markets. The bank also warns that correlations with other assets can change over time. This instability complicates the assessment of overall risk in a diversified portfolio.

This caveat explains why JPMorgan excludes cryptocurrency from its main covariance matrices. These tables help measure how the returns of multiple investments move together. They assist managers in assessing the effect of a new position on overall risk. When correlations become unstable, models lose part of their reliability. Investors then have less visibility to precisely calibrate their exposure.

The study also describes the investment characteristics of this asset as speculative. It connects its evolution to monetary easing but also to adoption, regulation, and liquidity. These factors can alter its behavior and influence future returns. The authors remind that its fundamentals differ from those of traditional assets generating cash flows. This difference makes projections more complex, even over several years.

Grayscale adopts JPMorgan’s assumptions to examine possible benefits of diversification. Zach Pandl highlights the combination between a high expected return and a relatively low correlation with large U.S. equities. However, he does not present these parameters as guarantees of performance. Their evolution will depend on market conditions and links between investment categories. Thus, Bitcoin’s contribution to the portfolio will depend on these changes.

BlackRock and Bank of America frame digital allocations

Recommendations from major financial firms show different approaches regarding cryptocurrency allocations. In June, BlackRock described a 1% to 2% exposure to bitcoin as a potential complementary diversifier. This range aims to add a source of return with behavior that can differ from traditional investments. The analysis also compares its contribution to risk with that of an exposure to major technology stocks.

BlackRock nevertheless warns that a larger position could significantly increase the portfolio’s overall risk. This caution echoes the reservations expressed by JPMorgan about market volatility. A limited allocation does not produce the same effects as a substantially larger position. Managers thus need to consider the weight of each asset and their clients’ ability to withstand marked fluctuations.

In December 2025, Bank of America recommended an allocation of 1% to 4% in digital assets for certain eligible clients. This guidance targeted investors who were comfortable with high volatility. It concerned digital assets broadly and favored regulated investment vehicles. The recommendations applied to Merrill wealth management activities, Bank of America Private Bank, and Merrill Edge.

These recommendations show that major banks seek to frame exposure to cryptocurrencies. The proposed ranges remain different depending on institutions and client profiles. BlackRock favors a more limited exposure, while Bank of America envisions a higher range. In both cases, institutions consider the risk associated with these investments. They therefore do not present these allocations as rules applicable to all investors.

Grayscale launches model portfolios for advisors

On September 14, Grayscale launched four model portfolios designed for financial management professionals. These models offer different investment combinations built from exchange-traded products linked to cryptocurrencies. They provide a framework for advisors wishing to include this asset category in their allocations. The responsibility for decisions made on behalf of clients still rests with professionals.

The portfolios use a weighting based on asset market capitalization. Grayscale also plans a quarterly rebalancing to adjust proportions over time. Each strategy caps the weighting of a single asset at 40% of the model portfolio. This limit prevents any single position from occupying too large a part of the proposed allocation. However, it does not replace the individual analysis of each investor.

These tools complement recommendations made by several major financial players. The ranges from BlackRock and Bank of America show that institutions consider measured exposures. Grayscale’s models offer structures that advisors can adapt. They do not automatically determine the final distribution of holdings. Weighting choices remain the responsibility of professionals and depend on the specific constraints of each portfolio.

In the long term, JPMorgan’s forecast places bitcoin among assets showing the highest expected compound return in its study. However, this outlook comes with an annualized volatility of 55% and unstable correlations. Recommendations from BlackRock and Bank of America illustrate the search for a balance between diversification and risk control. The future place of cryptocurrency will thus depend on its actual performance, adoption, and relationships with other markets.