Bitwise Raises Bitcoin 2036 Price Target to $1.6 Million, Sees 34.3% Annual Returns

Bitwise, the crypto asset manager, raised its 2036 price target for Bitcoin to $1.6 million from $1.3 million. The firm projects a 34.3% compounded annual return over the next decade, citing institutional inflows and limited new supply.

The forecast was published in Bitwise’s report, “2027 Bitcoin Long-Term Capital Market Assumptions,” according to crypto news outlet The Block on October 28. The report compared that outlook with expected annual returns of 6.7% for U.S. equities and 10.8% for private equity.

The higher target reflects Bitwise’s larger estimate of the markets Bitcoin can enter. The firm raised its 2036 estimate for the global store-of-value market to $110 trillion from $91 trillion, and for the institutional investment market to $303 trillion from $216 trillion. It left its assumptions for Bitcoin’s market share in each market unchanged.

Bitwise said greater institutional allocation would create demand well above new supply. Citing Boston Consulting Group estimates, the firm said that if 1% to 5% of the roughly $147 trillion managed by institutional investors is allocated to Bitcoin over the next decade, that could generate $1.5 trillion to $7.4 trillion in demand. By comparison, annual new supply from mining is about $14 billion.

The base-case target of $1.6 million assumes Bitcoin captures 25% of the store-of-value market and 1% of institutional assets by 2036. Bitwise put its bear-case target at $130,686 and its bull-case target at $3.67 million.

Matt Hougan, Bitwise’s chief investment officer, said the firm is more bullish on Bitcoin than it was a year ago. He cited smaller drawdowns during the recent correction, regulatory progress and rising demand for store-of-value assets such as gold as reasons for the stronger long-term outlook.

Bitwise also expects Bitcoin’s price volatility to decline over time. It lowered its average volatility forecast for the next 10 years to 27.8% from 32.9% a year earlier.

Ryan Rasmussen, Bitwise’s head of research, said Bitcoin will remain a volatile asset prone to sharp declines. Still, price swings should moderate as institutional participation deepens, he added.