Bitwise CIO Matt Hougan presented long-term capital market assumptions projecting Bitcoin could reach $1.3 million by 2035. The framework was developed to address inquiries from twelve major institutional platforms managing trillions in assets, reflecting a growing demand for quantitative tools in evaluating Bitcoin allocation.
Requests from institutional investors have risen sharply, contrasting with zero requests through 2024. These institutions include national account platforms, financial advisor groups, and investment committees assessing cryptocurrency exposure.
Bitcoin Benchmarking Against Gold
The valuation model is grounded in Bitcoin’s market share relative to gold, projecting growth from 9% to 25% of gold’s capitalization by 2035. Hougan highlighted that gold’s market expanded from $2.5 trillion in 2004 to $27 trillion today.
Using conservative assumptions, Bitcoin could reach seven-figure valuations without requiring extreme adoption scenarios. Harvard University’s allocation of roughly $500 million in Bitcoin alongside $250 million in gold exemplifies institutional recognition of the cryptocurrency as a hedge against currency debasement.
Correlation, Returns, and Volatility Outlook
Bitcoin exhibits a 0.21 correlation to equities on a 30-day rolling basis, indicating low co-movement with traditional markets. Bitwise projects this correlation may rise to 0.36 over time but remain below 0.5, preserving Bitcoin’s diversification benefits.
Expected annualized returns over the next decade are 28%, significantly above the 6% for equities and 5% for bonds projected by Wall Street consensus. Volatility has declined since 2012 and is forecast to stabilize at approximately 33%, providing a comparative risk profile similar to private equity assets.
