JPMorgan Chase Says That Bitcoin Will Outperform Stocks, Bonds, and Gold Over the Next 10 Years. Here's Why It Might Be Right

Per a new report, the asset management arm of JPMorgan Chase (NYSE: JPM) has a base case in which Bitcoin (CRYPTO: BTC) beats domestic stocks, bonds, and even gold during the next 10 years. It expects the crypto to return 10% annually during that period, versus 7.5% for U.S. large-cap stocks, 5.6% for broad U.S. bonds, and 5.5% for gold.

It's the first time the report has put a range on Bitcoin's returns, and it comes with a handful of heavy caveats. Although the figures it calculated are unlikely to prove true in 2036, the drivers for those results are hard to argue against, and it's my view that JPMorgan Chase is directionally correct. Here's why.

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JPMorgan Chase's base case expects a lot of volatility

The JPMorgan Chase report is largely about the investing implications of the macroeconomic conditions facing the world during the coming years, touching on everything from inflation to global warming and, of course, Bitcoin.

It expects artificial-intelligence-driven productivity gains to push the U.S. economy's real growth rate to 2.1% annually, with inflation averaging 2.4% in the same period. It also raised its expected annual return for large companies, such as those in the S&P 500 index, from 6.7% to 7.5%, citing strong profit margins.

But it contends that Bitcoin will be buoyed by three different factors that will offer better performance than this.

The most important driver, with a 65% weight in the calculation, is Bitcoin's slowing supply growth relative to global money growth. The second-most-important factor, with a weight of 30%, is Bitcoin's inclusion in portfolios alongside allocations to other scarce store-of-value assets, such as gold. The last driver is the weakest: the coin's increasing network activity.

The bank's estimated growth rate for its base case implies that Bitcoin would be priced at about $211,130 by 2036. Its bear case, which calls for an 11.2% annual loss, implies a price of about $24,817, roughly 70% below its $81,300 level as of Oct. 26. The bull case would see it grow by 16.6% annually.

But no matter which of those scenarios plays out, the bank expects the coin's volatility to be 55%, based on historical data.

Is JPMorgan Chase right about Bitcoin?

Overall, JPMorgan Chase's projections for Bitcoin's price growth are on the bearish side compared to Bitcoin's history, but they look reasonable. The coin has a 10-year compound annual growth rate (CAGR) of 63%.

The supply model is difficult to dispute; Bitcoin's next halving, when the number of new coins miners earn per block is halved, is expected sometime in April 2028. The U.S. M2, one gauge of the broad money supply, grew by 5.7% in the year through August 2026.

The bank doubts that a currency-debasement scare will spark a rush into crypto, but its model doe assumes a modest shift. Its projected inflation during the next decade is significantly lower than September 2026's 3.7% annual pace, which means that if inflation remains elevated, the importance of Bitcoin as a potential hedge against it could drive its performance toward the bull case.

Still, the bank calls the coin "a speculative asset and a hedge against monetary easing." It says volatility has declined, but unstable correlations make Bitcoin premature as a diversifier.

Though JPMorgan Chase still doesn't recommend buying Bitcoin, it probably makes sense to own at least a little to gain exposure to its upside in the bank's base case, and perhaps a bit more upside if the bull case plays out.

JPMorgan Chase is an advertising partner of Motley Fool Money. Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and JPMorgan Chase. The Motley Fool has a disclosure policy.