J.P. Morgan Leaves Bitcoin Out of Main Allocations Despite 10% Forecast

J.P. Morgan Asset Management included Bitcoin (BTC) in its long-term forecasts for the first time but did not make it a portfolio allocation, limiting the role of its 10% annual return assumption in the firm’s main models.

The 2027 outlook pairs that return estimate with an assumption of 55% annualized volatility. Both figures apply to a planning horizon of 10 to 15 years. They are long-term assumptions, not estimates of what Bitcoin will return in any single year.

For comparison, the firm assumes annual returns of 7.5% for U.S. large-cap stocks and 5.5% for gold. Bitcoin’s estimate is 2.5 percentage points above the stock figure and 4.5 points above the gold figure. Those comparisons concern specific asset categories; they do not imply that Bitcoin’s assumed return exceeds every stock or bond forecast.

The higher return estimate has not led the firm to treat Bitcoin as a dependable diversifier in a balanced portfolio. Bitcoin’s relationship with other assets has been inconsistent, complicating its use in a long-term allocation. The firm omitted Bitcoin from its main covariance matrices, which estimate how assets move in relation to one another, while providing a smaller matrix that includes it.

The distinction separates a forecast for an individual asset from a decision about what belongs in a portfolio model. Bitcoin has a place in the firm’s return and risk comparisons, but it is not included as an allocation.

The outlook also projects a 7% annual return for a portfolio of 60% stocks and 40% bonds over 10 to 15 years. That is an annual estimate for a mix of assets, rather than a total return for the period or a direct substitute for Bitcoin’s single-asset forecast.