Bitwise Asset Management has raised its 10-year base-case price target for Bitcoin (BTC) from $1.3 million to $1.6 million. The revision is driven by institutional rotation into the digital asset, expanding BTC markets and stabilizing market cycles.
Dubbed the “2027 Bitcoin Long-Term Capital Market Assumptions,” the report discussed Bitcoin’s volatility, returns, and correlation with other assets in the next decade.
Bitwise predicts Bitcoin at $1.6 million by 2036
To begin with, Bitwise notes several addressable markets for Bitcoin. Institutions top the list, followed by emerging market currencies, store of value, and offshore wealth.
Currently, global institutions control about $140 trillion in assets – an amount Bitwise projects could grow to $304 trillion by 2035. A 1%-5% allocation from this pool would generate $1.5 trillion to $7.4 trillion in Bitcoin purchases.
Factoring in this demand, Bitwise then calculates possible Bitcoin prices for 2036, starting at a September price of $83,557. Its base case is $1,599,766, bull case is $3,667,911, and bear case is $130,686.
Note that the math also factors in Bitcoin’s compound annual growth rate of 34.3%, an average volatility of 27.8%, and average correlation to US stocks at 0.43.
In the end, Bitwise concludes that it is confident Bitcoin will be the best-performing asset of the next decade.
Caveats
While the best-case scenario gives much to hope for, Bitwise warns against three major risks that could severely impact the crypto ecosystem.
The first is quantum computing developments, which could exploit vulnerabilities in Bitcoin’s public-key cryptography. Just recently, Google marked another achievement in this field, bringing us some time closer to Q-day.
The second is AI-driven mathematical advances, which could completely bypass quantum computing to break Bitcoin’s cryptography using existing technology.
Last but not least are regulatory reversals, which could massively impact institutional investor sentiment since their operations are bound by regulatory compliance.
Additionally, Bitwise cautions that volatility will persist in the face of ”significant but diminishing drawdowns.” A less conservative Monte Carlo simulation showed Bitcoin could achieve prices of over $4 million by year-end 2033, and $5.6 million by year-end 2034.
Community reaction
As Bitcoin crossed over to $81,000, the Bitwise report increased confidence in Bitcoin’s long-term value. Many, however, expressed dissatisfaction with the wide margin of predictions, saying it offers little certainty.
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