Bitwise Model Targets $1.3M By 2035

Institutional investors are increasingly demanding a rigorous Bitcoin forecast as they explore how the asset fits into long-term portfolio strategies.

Bitwise model targets $1.3 million bitcoin by 2035

Bitwise Chief Investment Officer Matt Hougan has outlined long-term capital market assumptions that place Bitcoin at $1.3 million by 2035 in the firm’s base case. The framework is designed for professional allocators who need quantitative justification before adding digital assets to diversified portfolios.

Over the past year alone, Hougan said 12 major institutional platforms overseeing trillions of dollars in assets requested formal assumptions for Bitcoin. Previously, through 2024, there had been zero such requests, marking a notable shift in institutional behavior. Moreover, those inquiries came from national account platforms, large financial advisor networks and investment committees assessing dedicated Bitcoin exposure.

Bitcoin valuation framework built on the gold market

The Bitwise bitcoin valuation model anchors its projections to the global gold market. Today, Bitcoin represents roughly 9% of gold’s market capitalization, and the base case assumes this share climbs to 25% by 2035. However, the analysis also stresses that the underlying gold market itself has expanded dramatically over time.

When gold ETFs launched in 2004, gold’s total market value stood near $2.5 trillion. That figure has since surged to roughly $27 trillion, according to Hougan. By comparison, Bitcoin’s market capitalization was around $2 trillion at the time spot Bitcoin ETFs went live, giving the crypto asset a starting point similar to early gold ETF adoption.

Under a more conservative path, if Bitcoin simply keeps its current 8% share of the gold market while gold continues to grow at historical rates, the model already points toward seven-figure prices. That said, the Bitwise bitwise bitcoin projection does not assume Bitcoin fully replaces gold. Instead, the base case expects Bitcoin to capture about one-quarter of gold’s value, which Hougan characterizes as aggressive but not extreme.

Harvard University has already provided a real-world example of this evolving dynamic. The institution allocated nearly $500 million to Bitcoin and about $250 million to gold, effectively creating a 2:1 ratio in favor of the cryptocurrency. Moreover, this move underscores growing institutional bitcoin demand and highlights how leading endowments are treating Bitcoin as a strategic debasement hedge within multi-asset portfolios.

Correlation to equities and role in diversified portfolios

Hougan devoted a significant portion of his presentation to the bitcoin equity correlation narrative, which remains central for risk managers. Over the past decade, Bitcoin’s 30-day rolling correlation to equities has averaged roughly 0.21. In statistical terms, levels between 0 and 0.5 indicate low correlation, meaning the assets do not reliably move in tandem.

Bitcoin has never sustained a correlation above 0.5 for long periods. The only notable spike came during the COVID-era stimulus, when unprecedented policy actions briefly pushed correlations higher across nearly all major asset classes. However, that phase proved temporary as macro conditions normalized.

Looking ahead, Bitwise expects the long-run correlation between Bitcoin and equities to rise toward 0.36. Central bank policies increasingly influence risk assets, which should nudge correlations higher over time. That said, a 0.36 reading still sits well below 0.5, preserving the asset’s potential diversification benefits. At the same time, Hougan noted that Bitcoin shows essentially zero correlation with bonds and only very low correlation with commodities.

Projected bitcoin annualized returns versus traditional asset classes

Bitwise’s capital market assumptions call for bitcoin annualized returns of about 28% over the next decade. This figure sharply contrasts with Wall Street consensus expectations of roughly 6% per year for stocks and about 5% for bonds. Moreover, among traditional alternatives, only private equity is projected to generate double-digit performance, at approximately 10% annually.

These return estimates position Bitcoin as a high-growth satellite allocation rather than a core replacement for equities or bonds. However, for institutional allocators able to tolerate volatility and illiquidity-style drawdowns, the prospective risk-reward profile compares favorably with other return-seeking assets. Hougan framed this as an opportunity for modest portfolio weights to have an outsized impact on long-run performance.

Bitcoin forecast and comparison with gold

Despite its reputation for sharp swings, Bitcoin’s bitcoin volatility trend has been declining steadily since 2012, based on 30-day rolling volatility measures. Hougan compared this trajectory to gold, whose volatility fell consistently for roughly 20 years after the end of the gold standard. The historical analogy supports the idea that market maturation and broader adoption can naturally dampen price fluctuations over time.

Looking forward, Bitwise expects Bitcoin volatility to keep drifting lower but at about half its prior pace. Under the model, volatility settles near 33%, versus around 26% for private equity. Moreover, this residual gap means Bitcoin remains a higher-risk asset, yet not out of line with other opportunistic exposures used by institutional investors.

Within this structure, the firm’s long-term bitcoin gold comparison helps explain why some allocators see Bitcoin as a modern extension of the store-of-value trade. However, instead of requiring gold to disappear, Bitwise assumes both assets can coexist, with Bitcoin occupying a growing share of the overall monetary and hedge landscape.

Implications of the long-term bitcoin forecast for institutions

For investment committees, the formalized bitcoin forecast provides a data-driven framework to weigh potential upside against volatility, correlation and macro risk. It also normalizes Bitcoin alongside stocks, bonds, gold and private equity within a standard capital market assumptions toolkit. As a result, Bitcoin is increasingly evaluated not as a speculative anomaly but as a distinct asset class with measurable inputs.

In summary, Bitwise’s projections of a possible $1.3 million Bitcoin price by 2035, anchored to gold market dynamics, modest correlations and falling volatility, are reshaping how large institutions frame the asset. Whether those numbers are ultimately realized or not, the shift from zero to 12 institutional platforms requesting formal assumptions signals that Bitcoin’s role in global portfolios is moving from theoretical debate to practical implementation.