JPMorgan Asset Management includes bitcoin in long-term assumptions for the first time: 10-year annualized return expected at 10%, but 55% volatility remains a concern

JPMorgan Asset Management has, for the first time, included Bitcoin in its long-term capital market assumptions, predicting that over the next decade, its returns could outpace those of stocks, bonds, and gold. This is viewed as a milestone in Bitcoin's acceptance on Wall Street. However, the issue remains that Bitcoin's extreme volatility may undermine its appeal on a risk-adjusted basis.

JPMorgan Asset Management's baseline scenario forecasts an annualized return for Bitcoin of 10% over the next ten years, but also assumes an annualized volatility of as much as 55%, more than triple that of large-cap U.S. stocks. In this week's report, the firm stated that, due to Bitcoin’s unstable correlation with other assets, it has not yet been included in their main portfolio models.

High volatility erodes compound returns, as steep losses require even greater gains to recover. Bitcoin ETF investors are familiar with this: if one bought near the peak around $126,000 in 2025, holdings could have experienced a loss of up to 50% as prices subsequently declined.

The JPMorgan Asset Management team, including Tim Lintern, Thushka Maharaj, and Sean Daly, wrote: “We believe it is still too early to view Bitcoin as a diversification tool within a balanced portfolio. However, if volatility continues to decrease and correlations with other assets become more stable, the situation could change in the future, especially as regulation becomes clearer and liquidity and price discovery continue to improve.”

Since the pandemic, many Wall Street institutions have expanded their involvement in the crypto sector, moving from tentative inquiries to more substantial experiments, including offering certain coin trading to clients, launching crypto-themed funds, and experimenting with tokenization.

JPMorgan Asset Management analysts noted that although many investors still view Bitcoin as a speculative asset, they are actively exploring cryptocurrencies. Recent surveys show that one in ten clients holds crypto in their portfolios, and around 17% indicate plans to “prioritize allocating to crypto.” Part of the reason is the regulatory framework has become more mature and defined.

However, researchers at the firm still pointed out that because Bitcoin’s “correlation with other assets is unstable,” it is currently insufficient as a diversification tool in balanced portfolios. They wrote: “If correlations stabilize and volatility declines, Bitcoin’s portfolio utility may improve in the future.”

More broadly, the researchers discussed in the report how “economic nationalism, technology adoption, and capital reallocation” may drive asset returns over roughly the next decade. They concluded that governments will invest in “national resilience” and companies will compete to deploy new innovations, and these factors will shape capital allocation strategies. They stated that a $15 trillion “global capital expenditure supernova” will drive growth and robust asset returns.

The report noted: “Today, technology adoption is almost synonymous with artificial intelligence, but over the next decade, breakthroughs in other areas—from medicine to robotics to space—may also further support growth trends through investment and productivity gains.”