Morgan Asset Management Projects 10% Annual Bitcoin Return but Keeps It Out of Core Models

First reported 20 Oct, 21:16 UTCSource: Decrypt AI + 1 moreLast editorial activity 20 Oct, 21:16 UTCWrite a comment ↓

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According to Decrypt, Morgan Asset Management has issued its first long-term return forecast for Bitcoin, pegging it at 10% a year over the next 10 to 15 years. The firm has nonetheless left the cryptocurrency out of its main portfolio models, citing volatility and unstable correlations.

What the forecast projects

In its 2027 Long-Term Capital Market Assumptions, released on Monday, Morgan Asset Management projects a 10% compound annual return for Bitcoin over 10 to 15 years. That figure tops its projections of 7.5% for U.S. large-cap stocks, 5.5% for gold and 7% for a classic 60/40 stock-bond portfolio.

The report attaches an annualized volatility of 55% to Bitcoin, against about 17% for gold. That gap explains why Bitcoin's simple average of yearly gains reaches 20.9%, well above the compound rate an investor would actually keep after large price swings.

Bitcoin stays outside core models

Despite the return projection, the firm has not added Bitcoin to the models it uses to map how assets move together. Instead it built a smaller, separate matrix that compares Bitcoin with a subset of other assets, pointing to volatility and unstable correlations as obstacles to wider portfolio inclusion. The firm also described the currency debasement bull case for the asset as "wide of the mark."

Crypto manager disputes volatility input

Bitwise Chief Investment Officer Matt Hougan welcomed the forecast but not every input. Hougan argues that the 55% volatility assumption is too high, which in turn makes the return forecast too conservative. Bitwise, which manages crypto index funds and ETFs, has a stake in that view.

JPMorgan's wider blockchain activity

The forecast comes as JPMorgan expands its own blockchain work. The bank is moving JPM Coin, a token representing dollar deposits, onto Ethereum, and has joined BlackRock, Goldman Sachs and the DTCC in tokenized stock efforts.

Open questions

Will the firm add Bitcoin to its main portfolio models in future assumptions?
Does the 55% volatility assumption hold up against Bitcoin's actual price history?

Key facts

Morgan Asset Management projects a 10% compound annual return for Bitcoin over 10 to 15 years in its 2027 Long-Term Capital Market Assumptions.

This is the firm's first long-term forecast for the asset and sits above its 7.5% outlook for U.S. large-cap stocks and 5.5% for gold.

The report puts Bitcoin's annualized volatility at 55%, compared with about 17% for gold.

The firm has not added Bitcoin to the models it uses to map how assets move together.