The asset management company Bitwise, with assets worth $5 billion, states that Bitcoin will become the best performing asset in the next decade by a significant margin, with its price potentially soaring to nearly $3 million by 2035.
In its latest research report, Bitwise outlines three scenarios for Bitcoin's price by 2035. Even the most conservative forecast shows BTC reaching $1.3 million in ten years, with an annual compound growth rate of 28.3%, significantly higher than the expected returns for stocks (6.2%), bonds (4%), and gold (3.8%) during the same period.
In the optimistic scenario, Bitwise expects the BTC price to rise to $2.97 million, with a near 40% compound annual growth rate. The company notes that Bitcoin's growth momentum mainly comes from institutional capital inflows, increased demand for inflation hedging, and its limited supply.
Despite this, Bitcoin has shown significant volatility recently. Over the past month, BTC has fallen by more than 5%, and as of 1:48 AM Eastern Time, it has a 24-hour drop of 1%, trading at $111,285.66.
Bitwise emphasizes that rising US debt, expanding fiscal deficits, devaluation of fiat currencies, and questions about the dollar's role in the global economy could affect BTC prices over the next decade. The report shows that US debt has increased from $650 billion to $36 trillion over fifty years, half of which was accumulated in the past decade.
Bitwise states: "These trends may increase the demand for non-fiat currency hedging tools such as gold and Bitcoin. Since 2020, they have outperformed other major assets, indicating that investors are prepared for this change."
The enthusiasm of institutional investors further supports the long-term bullish outlook for Bitcoin. Bitwise points out that Bitcoin has become a genuine institutional asset, evolving from a niche investment primarily held by retail investors to an asset focused on by hedge funds, pensions, family offices, financial advisors, corporations, and sovereign wealth funds.
In January 2024, the US spot Bitcoin ETF was approved, promoting BTC's institutional adoption and allowing traditional investors to access Bitcoin safely and at low cost. Since their launch, these ETFs have attracted billions of dollars, with BlackRock's IBIT BTC ETF alone bringing in over $58.28 billion.
More and more publicly traded companies are incorporating Bitcoin into their balance sheets, continuing the trend started by Strategy (formerly MicroStrategy) in 2020. Strategy currently holds 632,457 BTC, becoming the world's largest Bitcoin funding company. There are now 309 BTC asset management companies in the market, holding a total of 3.68 million BTC reserves.
In the ranking of countries holding Bitcoin, the United States is first with 106 related entities, followed by Canada, the UK, Japan, and Hong Kong.
Bitwise emphasizes that while the spot BTC ETF is the main catalyst for institutional adoption, "various factors, including changes in the regulatory stance towards cryptocurrencies after the 2024 US elections, have accelerated this trend."
