JPMorgan Chase (JPM), the largest U.S. bank, says that Bitcoin (BTC) is likely to outperform stocks and other assets such as bonds and gold over the next decade.
The New York-based lender forecast a base case of 10% annualized returns for Bitcoin over the next 10 years in its latest “Long-Term Capital Market Assumptions” report.
JPMorgan’s forecast also includes a bear case for Bitcoin of -9.7% and a bull case of 17% annual returns over the coming decade.
The bank expects a 7.5% to 7.7% annual return in U.S. large and small-cap stocks, as well as a 5.5% increase in the price of gold. It sees bond prices falling as much as 6.6% per year.
The report is significant as it marks the first time that JPMorgan Chase has put a range on Bitcoin returns in one of its research reports.
Still, JPMorgan said it maintains a cautious view of Bitcoin and other digital assets, writing that “volatility and unstable correlation to other asset classes…remain an obstacle to [its] widespread inclusion in portfolios.”
Furthermore, JPMorgan does not view Bitcoin as a portfolio diversifier and continues to say that the cryptocurrency is a “speculative asset.”
The price of BTC is down 7% this year following a prolonged crypto downturn that began a year ago. Bitcoin is trading at $81,500 U.S. on Oct. 20.
