J.P. Morgan is confident: Bitcoin will beat forecasts in the coming decade

J.P. Morgan predicts Bitcoin will generate an annual return of 10% over the next decade, compared to 7.5% for U.S. stocks. The bank warns of high volatility of 55% and notes that the risk-adjusted return is not higher than that of stocks.

Investment bank J.P. Morgan has published a long-term forecast predicting that Bitcoin will generate an annual return of 10% over the next decade, compared to 7.5% for large U.S. stocks. This is the first time the bank has included the cryptocurrency in its capital market forecast report. Alongside the high return, the bank warns of annual volatility of 55% – nearly three times the expected volatility for stocks (18%). This means that Bitcoin's risk-adjusted return is not higher than that of stocks. The estimate is based on Bitcoin's diminishing mining rate relative to the expanding global money supply. The bank defines the currency as a "speculative asset and a hedge against monetary easing." The article does not include a specific allocation recommendation but notes studies by BlackRock (2%) and Morgan Stanley (up to 4%).