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Pet Rock No More? JPMorgan Sees Bitcoin Outperforming Stocks and Gold
- JPMorgan Asset Management forecasts Bitcoin delivering 10% annual returns over the next decade in its base case, compared with 17% in a bull scenario and -9.7% in a bear scenario.
- Its Bitcoin forecast exceeds projected returns for US equities, bonds and gold, despite CEO Jamie Dimon’s longstanding criticism of the crypto.
- JPMorgan estimates Bitcoin’s annualised volatility at 55%, far above emerging-market equities at 21.4% and US small caps at 21%.
- The bank views Bitcoin primarily as a speculative asset and hedge against monetary easing rather than a reliable portfolio diversifier.
How the tables have turned. JPMorgan CEO Jamie “Pet Rock” Dimon has called Bitcoin a “fraud”, “worthless” and a “hyped-up fraud”, followed by his famous pet rock comments. He told CNBC at Davos that he’d “call it the pet rock”, alleging Bitcoin essentially has no function.
He made those comments between 2017 and 2024, so not that long ago.
Meanwhile, JPMorgan’s (JPM) analysts have long taken a more measured view of Bitcoin. Now, the bank’s asset management division has published its first long-term Bitcoin forecast, putting the OG crypto ahead of stocks, bonds and gold over the next decade.
In their book, Bitcoin will gain 10% per year over the next decade – in the base-case scenario, that is. They see a bear scenario at -9.7% and a bull case at 17%.
The bank estimates Bitcoin’s growth in comparison to 5.6%–6.6% growth in US bonds, 5.5% in gold and 7.5% and 7.7% in large- and small-cap US equities respectively.
While this is a stark contrast to when Dimon said he’d fire any trader at his firm who traded Bitcoin, it isn’t to say the bank has completely changed its views.
Read more: BlackRock Makes a Splash with New Bitcoin ETF Filing as IBIT Takes in US$665M
JPMorgan Still Sees a Lot of Volatility
JPMorgan Asset Management still calls Bitcoin volatile and unstable compared to other assets, with an annualised volatility rate of 55%, the highest rate for any asset in its report. The second-highest volatility is in emerging-market equities at 21.4%, closely followed by US small caps at 21%.
The report also denies Bitcoin a role as a diversification tool, saying that it instead functions as a “speculative asset and a hedge against monetary easing”.
It lacks a strategic role in portfolios other than as a bet on fiat currency expansion or future asset trading on blockchains.
JPMorgan Asset Management
Meanwhile, earlier this year, JPMorgan analysts led by Nikolaos Panigirtzoglou said that investors were increasingly treating Bitcoin as a safe-haven asset rather than gold during the Iran conflict.
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Related: JPMorgan Brings JPM Coin to Ethereum in Major Institutional Blockchain Expansion
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
