Bitwise lifts bitcoin target to $1.6 million by 2036

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Bitwise bitcoin 2036 target

Highlights

Bitwise raised its 2036 base-case bitcoin price target to $1.6 million from $1.3 million, citing stronger store-of-value and institutional markets.
Bitwise's 2036 forecast assumes bitcoin captures 25% of a $110 trillion global store-of-value market and 1% of $303 trillion in institutional assets.
Bitwise projects institutional allocations of 1%-5% to bitcoin could drive $1.5 trillion–$7.4 trillion in demand, with volatility expected to fall to 27.8% over the next decade.

Updated forecast and market assumptions

As reported by The Block, Bitwise increased its 2036 base-case bitcoin price target from $1.3 million to $1.6 million in its 2027 Bitcoin Long-Term Capital Market Assumptions, released Wednesday. The firm says the revised outlook reflects higher estimates for the global store-of-value market and the institutional investment market, while leaving its bitcoin market-share assumptions unchanged from last year.

In a note to clients, Chief Investment Officer Matt Hougan said Bitwise raised its estimate for the global store-of-value market in 2036 to $110 trillion from $91 trillion and for the institutional investment market to $303 trillion from $216 trillion. For its base case, the firm assumes bitcoin captures 25% of the global store-of-value market and 1% of institutional investment assets by 2036.

Bitwise says its model compares the future size of markets bitcoin could compete in and assigns the cryptocurrency a share of each. The report sets a bear-case target of $130,686 by 2036, based on a 2.5% share of the store-of-value market, and a bull-case target of $3.67 million, based on a 50% share.

Institutional demand and volatility outlook

Bitwise says institutional investors could become a major source of demand over the next decade. Citing Boston Consulting Group estimates that institutions control about $147 trillion in assets, the firm expects 1% to 5% allocations to bitcoin to generate $1.5 trillion to $7.4 trillion in demand, compared with roughly $14 billion in new annual bitcoin supply from mining.

The report notes that 20.1 million bitcoin, or 95.7% of the maximum 21 million supply, is already in circulation. Hougan says the firm is more bullish than a year ago, pointing to continued regulatory progress, rising demand for hard assets such as gold and what he describes as a relatively shallow pullback in the latest cycle.

Bitwise also expects average bitcoin volatility to decline to 27.8% over the next decade from the 32.9% forecast in last year's report. Head of Research Ryan Rasmussen says bitcoin is likely to remain volatile, but that deeper institutional adoption should reduce the severity of those swings over time.

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