Bitwise: Bitcoin as the Dominant Institutional Asset of the Next Decade
Cryptocurrency investment company Bitwise has published a report predicting that Bitcoin will become the most profitable institutional asset in financial markets over the next ten years. According to its analysis, the price of Bitcoin could reach $1.3 million by 2035.
Key growth drivers
Bitwise's forecast is based on three fundamental factors:
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Growing institutional demand. Bitcoin is expected to become increasingly used as an institutional investment vehicle, leading to a steady net capital inflow. This process will be fueled by further development of infrastructure, such as exchange-traded funds (ETFs), and increased confidence from large asset managers.
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Need for protection against inflation. In the context of macroeconomic instability and devaluation of fiat currencies, demand for “hard assets” is growing. Bitcoin, with its predictable and limited emission, is considered an ideal hedge against inflation, attractive primarily to institutional investors.
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Limited and inelastic supply. Bitcoin's hard-coded supply cap (maximum 21 million coins) is considered the most important structural factor supporting its price in the long term. The inability to arbitrarily increase the emission protects the asset from inflation, which is typical for traditional financial systems.
Expected returns and risks
Bitwise predicts that Bitcoin could achieve compound annual returns of 28.3% over the next decade. The company expects the asset to remain volatile, but likely to be below its historical averages as it matures and becomes institutionalized.
An important property of Bitcoin will remain its low correlation with traditional asset classes such as stocks and bonds, which strengthens its role in portfolio diversification. The report notes that the traditional model of a “four-year cycle” associated with the halving is losing its relevance amid the growing influence of macroeconomic and institutional factors.
Key risks include regulatory uncertainty, potential adverse legislative changes and political risks, and the relative newness of the asset. Technological threats, such as the development of quantum computing, are considered unlikely in the foreseeable future but require attention.
Bitwise describes Bitcoin’s transformation from a niche digital experiment to a $2.4 trillion market cap asset as its most important milestone. The next phase, the company believes, will be the “1 to 100” transition, where Bitcoin establishes itself as a mature and integral component of the global financial system.
Source: cryptonews.net
