In the 31st annual edition of its Long-Term Capital Market Assumptions, J.P. Morgan Asset Management has included bitcoin for the first time. It projects an average annual return of 10% over the next ten years, with volatility of 55%, while its forecast for gold is 5.5%. Bitcoin is assessed with a separate covariance matrix. On the same day, BlackRock's IBIT ETF recorded inflows of $665 million.

What it means: Long-term assumptions from big asset managers are not just forecasts but a tool that advisers, pension funds and institutions use to allocate portfolios. Including bitcoin in such a document means it is now treated as an asset class to be modelled rather than fringe speculation. The numbers matter, though: 55% volatility is several times that of equities, so even with a 10% return, the risk-adjusted profile is not impressive. In practice, that points to small positions in a diversified portfolio, not large ones. Assessing bitcoin with a separate covariance matrix shows analysts do not consider its relationship with other assets stable. The comparison with gold is also interesting, since the two are often presented as alternative stores of value. For European investors, who can access bitcoin through ETNs and in some markets now ETFs, such estimates may influence advisers' recommendations. They nonetheless remain assumptions, not guaranteed returns, and past forecasts for volatile assets have often missed by a wide margin in both directions.

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