Could holding Bitcoin for over a decade yield higher returns than US large-cap stocks or gold? Global investment bank JP Morgan has answered this question with concrete numbers by presenting its long-term expected returns for Bitcoin for the first time. The forecast projects an annualized compound return of 10% over the next 10 to 15 years. However, this high return outlook is accompanied by the risk of severe price volatility. In the actual market, overlapping skepticism over artificial intelligence (AI) investments by US tech companies and oil price spikes originating from the Middle East have pushed Bitcoin down into the $80,000 range. The long-term profit potential and short-term investment risks are clearly contrasting.

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On the 23rd, Bitcoin slipped into the $81,000 range in the virtual asset market. According to the virtual asset exchange Bithumb, Bitcoin was trading at 108.98 million Korean won as of 8:10 AM that day, down 0.56% from 24 hours ago. Its price on CoinMarketCap stood at around $81,237. At 4 PM on the same day, it was recorded at $81,805, down 0.43% from a week ago, giving up gains from earlier in the week when it had surpassed the $84,000 mark.

Major altcoins also showed weak trends. Ethereum fell 1.87% compared to a week ago, while Solana and Ripple dropped 1.14% and 1.19% respectively on the morning of the 23rd. Among the top 100 virtual assets by market capitalization tracked by Xangle, LIT (12.07%) was the only token with a weekly return exceeding 10%.

JP Morgan's First Long-Term Outlook: Bitcoin's Compound Annual Return at 10%

JP Morgan Asset Management recently released its "2027 Long-Term Capital Market Assumptions," presenting its long-term return forecast for Bitcoin for the first time. The annualized compound return over the next 10 to 15 years is estimated at 10%. This outpaces US large-cap stocks at 7.5%, a portfolio consisting of 60% equities and 40% bonds at 7%, and gold at 5.5%. This is the first time Bitcoin has been included in this outlook report, which is published for the 31st year this year.

However, it is difficult to judge investment attractiveness based solely on compound return forecasts. While the arithmetic mean annual return of Bitcoin calculated by JP Morgan is 20.9%, the projected compound annual growth rate (CAGR) is 10%. This is because actual investment performance accumulated over a long period can fall short of the arithmetic mean return when price fluctuations are factored in. JP Morgan assumed an annualized volatility of 55% for Bitcoin, which is more than three times higher than the volatility estimate for gold at about 17%.

When prices fluctuate wildly, gains made during bull markets can be eroded during bear markets. The smaller the principal investment becomes, the higher the return required to recover losses. JP Morgan's outlook demonstrates both Bitcoin’s high profit potential and the price risks that must be endured during long-term holding.

JP Morgan has not fully incorporated Bitcoin as a general investment asset like stocks or bonds. This decision stems from its high volatility and unstable correlation with other assets. Instead of including Bitcoin in core models analyzing traditional assets, a separate model was utilized to examine its relationship with specific assets. This means that releasing a long-term return forecast is distinct from recognizing Bitcoin as a primary portfolio asset.

A cautious stance was also maintained regarding the "devaluation of fiat currency," which is often cited as a basis for the Bitcoin bull case. It is difficult to conclude that funds will automatically flow into virtual assets simply because fiat currency loses value, according to the report. Although JP Morgan presented Bitcoin's long-term returns, it did not guarantee price increases or grant it equal status with existing investment assets.

Matt Hougan, Chief Investment Officer (CIO) of Bitwise, evaluated JP Morgan's outlook positively while pointing out that the volatility assumption is excessively high. He argued that estimating lower volatility could further raise Bitcoin's expected returns. Given that long-term performance forecasts vary depending on the assessment of volatility, JP Morgan's figures should be viewed as estimates contingent on risk rather than definitive return promises.

Shaken by Macroeconomics: AI Investment Concerns and Surging Oil Prices

Bitcoin’s short-term trajectory is reacting sensitively to macroeconomics and risk-asset investment sentiment. Driven recently by expectations of resumed peace negotiations between the US and Iran and strong earnings from AI companies, Bitcoin recovered the $84,000 level, but the upward momentum did not last long. Following the earnings reports of major US tech companies, concerns over AI investment costs resurfaced, spreading selling pressure to the tech stock and virtual asset markets.

The crypto-focused media outlet Coindesk reported that following Tesla and Meta’s contrasting earnings announcements, doubts regarding AI investments intensified, causing Bitcoin to suffer its largest drop in the past two weeks. Bitcoin fell as much as 2.9% past midnight Coordinated Universal Time (UTC) to briefly slip below $82,000. As growth expectations for the AI industry wavered, not only tech stocks but also the virtual asset market felt the impact.

Middle Eastern oil price spikes also pressured sentiment. December delivery Brent crude futures closed up $4.35 (4%) to $113.17 a barrel on the London ICE Futures Exchange, reaching the highest level since last May. Rising oil prices can heighten inflation and interest rate burdens, acting as a factor prompting investors to reduce their exposure to high-volatility assets.

The market is also paying close attention to the US Federal Open Market Committee (FOMC) meeting scheduled for the 27th–28th. If judgments regarding the interest rate path shift, investment sentiment across risk assets, including tech stocks, could be affected. Contrary to long-term return forecasts, short-term prices are fluctuating based on corporate earnings, oil prices, and interest rate outlooks.

Influx of ETF Funds Leaves Homework Behind: Separate from Institutional Incorporation

Amid price adjustments, institutional capital inflows and the participation of mainstream finance in virtual assets continued. US spot Bitcoin exchange-traded funds (ETFs) saw a net inflow of $526.7 million (approx. 697.7 billion KRW) on the 19th alone, marking the largest scale since September 22nd. However, a single day of capital inflows cannot be taken as definitive proof of a trend reversal in buying or price recovery.

Progress has also been made in financial sector-related businesses and regulatory alignments. Kim Ji-won, a researcher at KB Securities, pointed out key developments including JP Morgan's launch of the Ethereum deposit token JPM Coin, Blackrock's application to list a downside-protected Bitcoin ETF, and the US Office of the Comptroller of the Currency (OCC) finalizing rules for the GENIUS Act. Although the participation base of the institutional sphere is expanding, this does not automatically imply sustained increases in Bitcoin prices.

Investment sentiment indicators are also far from clear optimism. CoinMarketCap's Fear & Greed Index hovered at 48 points as of the afternoon of the 23rd, remaining in the "Neutral" stage—down 3 points from a week ago. On the same morning, the Bitcoin "Kimchi Premium" compiled by CryptoPrice stood at 0.96%, indicating that domestic trading prices were slightly higher than overseas levels.

JP Morgan's projected annualized compound return of 10% is significant in that it provides a figure allowing Bitcoin's long-term profit potential to be compared against major traditional assets. However, this is not a promise of future gains, but rather a long-term forecast calculated under the premise of volatility and risk. Wall Street has presented long-term returns for Bitcoin for the first time, but for investors to actually achieve those outcomes, they must weather the high volatility embedded within the forecast.

[ⓒ Global Economic Times. 무단전재-재배포 금지]