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Grayscale flags JPMorgan's 10% Bitcoin return assumption
Grayscale research head Zach Pandl says Bitcoin's place in JPMorgan Asset Management's 2027 long-term assumptions is an institutional milestone, with a projected 10% annual return topping other asset classes.
Why it matters: JPMorgan's assumptions give institutional investors formal return, volatility and correlation estimates for Bitcoin, shaping how wealth managers size crypto allocations.
Key points
- JPMorgan Asset Management projects a 10% compound annual Bitcoin return, against 7.5% for US large-cap equities and 9.8% for private equity.
- JPMorgan estimates Bitcoin's annualised volatility at 55% and its correlation with US large-cap stocks at 33%.
- Grayscale's Zach Pandl highlighted the assumptions on 4 Nov; JPMorgan released them on 19 Oct.
The projections, released on 19 Oct, put Bitcoin's compound annual return at 10%, the highest of the asset classes covered.
That figure compares with 7.5% for US large-cap equities, 9.8% for private equity and 7% for a 60/40 stock-bond portfolio. JPMorgan also estimated Bitcoin's annualised volatility at 55% and its correlation with US large-cap stocks at 33%, below international equities, corporate bonds and hedge funds, according to Pandl.
JPMorgan kept Bitcoin out of its main covariance matrices because of unstable correlations, and described its investment characteristics as speculative, linking its portfolio role to monetary easing.
Wealth managers have set differing limits. Grayscale launched four model portfolios built from crypto exchange-traded products on 14 Sept, capping any single asset at 40%.
Live updates on NewsFeeds:BitcoinDesk editor: Keshav Aggarwal (accountable for this page; this summary was not edited by hand)
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