Another factor may play an even bigger role in this cryptocurrency’s continued rise.
The last few years have been absolutely fantastic for investors. Almost every major asset class was positive in 2023 and 2024.
Stock investors saw the S&P 500 produce a total return of 26% in 2023, only to follow it up with a 25% total return the following year. Those who added gold to their portfolio have seen their investment grow over 90% since the start of 2023. The U.S. bond market has even held up well amid expectations for rate cuts, producing cumulative total returns around 13% in that time.
Amid all the monster returns investors saw in 2023 and 2024, one asset stood well above the crowd. Bitcoin (CRYPTO: BTC) returned 156% and 121% in 2023 and 2024, respectively. Granted, that came after a terrible 65% slide in 2022. Still, Bitcoin has dominated every asset class over the last 10 years.
Investors may think Bitcoin’s strong performance isn’t replicable, now that it has a $2.2 trillion market cap. And while it might not produce triple-digit annual returns over the next decade, it can still produce returns much higher than any other asset class through 2035.
Bitwise Asset Management recently published a report with a base case for the crypto reaching $1.3 million by 2035. That’s a 28% annual return, well above expectations for every other investable asset. Here’s why the analysts are so bullish.
At the top of Bitwise’s thesis are the expectations for growing adoption by institutional investors. The analysts see 1% of all institutional assets going toward Bitcoin, which would represent about $2.2 trillion in 2035.
It’s important to note Bitwise may be biased. Its primary business is managing investment funds specializing in cryptocurrency. It’s the company behind one of the largest spot Bitcoin exchange-traded funds on the market, the Bitwise Bitcoin ETF.
On the other hand, one can also see that forecast as Bitwise putting its money where its mouth is, since Bitcoin ETFs are a key vehicle driving institutional adoption.
It’s also worth pointing out that Bitwise isn’t the only group of analysts expecting strong growth in institutional investments flowing into Bitcoin. It’s also at the core of ARK Invest’s bullish thesis and that of many other analysts.
