Crypto Asset Manager Bitiwise is making a big bet on the future of Bitcoin (BTC), and expects the next decade will mark a period of major growth for the world's largest cryptocurrency.
In a report released Thursday, Bitwise analysts predicted that Bitcoin will become the best-performing institutional asset in the next decade, rising to $1.3 million by 2035.
The forecast comes at a time when Bitcoin prices reach new all-time highs, improved regulatory clarity and trading above $100,000 amid more institutional investors diving into the sector.
Bitwise's new price forecast means a combined annual growth rate of 28.3%. This is a revenue that reduces most traditional assets, but we believe that volatility will remain a critical feature of the market, even when it is lower than in past cycles.
An analyst led by Matt Hougan writes that three units will promote adoption and price assessments.
The first catalyst is the continuous emergence of Bitcoin as a facility-grade asset. The second is the growing demand for hard asset exposure in an inflationary environment, and the third is the fixedness of the new supply.
Bitwise also said that Bitcoin's “historic four-year cycle” paper, which has long been a touchstone for traders, is no longer relevant.
Still, they warn investors should expect a sudden drawdown. Among the biggest risks are changes in regulations, legislative changes in key markets, and the challenges of relatively new assets with limited historical data.
Quantum computing and other technical threats lie on the radar, but Bitwise considers them to be secondary concerns.
The company also acknowledges that uncertainty is met with Bitcoin's future forecast given the lack of long-term data. “We aim to make mistakes on the part of being conservative,” the memo said, highlighting that such models of prediction are still evolving.
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