Bitcoin Set to Outperform All Asset Classes? Bitwise Reports Surging Institutional Interest
Wall Street's quiet revolution—Bitcoin isn't just knocking; it's kicking down the door.
Institutional Adoption Accelerates
Fund managers and corporate treasuries are shifting allocations faster than ever. Pension funds, once Bitcoin's staunchest skeptics, now quietly accumulate positions through regulated vehicles. Family offices bypass traditional hedges entirely—gold's old guard watches helplessly as digital gold captures mindshare and capital.
The Performance Argument
Bitcoin's volatility still terrifies spreadsheet warriors, but its risk-adjusted returns silence them. Twelve-year track records now crush every major asset class—stocks, bonds, real estate, commodities. Even skeptical CFOs admit: ignoring Bitcoin resembles ignoring the internet in 1995.
Regulatory Tailwinds
Clearer frameworks from Washington to Brussels remove institutional excuses. ETF approvals opened floodgates—Bitwise's data shows allocations growing faster than tech stock bubbles. Traditional finance's 'if you can't beat them, join them' moment arrived about five years late.
Maybe traditional assets should worry less about Bitcoin beating them—and more about why they're losing to code written by an anonymous developer. Wall Street's latest embrace feels less like conviction and more like fearing irrelevance.
Growing Institutional Interest in Bitcoin
Hougan explained that long-term capital market assumptions serve as the foundation for how major financial institutions design portfolios. Each year, firms like JPMorgan and BlackRock release detailed outlooks that guide asset allocation strategies.
For the first time in 2025, professional investors have begun requesting that Bitcoin be included in these frameworks, with Bitwise reporting 12 such inquiries this year compared to none in previous years.
“The fact that they’re now asking for long-term capital market assumptions means that they’ve shifted their view: It’s no longer a one-off for the fringes of the portfolio; it’s starting to be considered for the core,” Hougan said in the memo.
He attributed this change to greater accessibility through regulated ETFs and approval by large account platforms managing trillions in client assets.
Bitwise also emphasized that Bitcoin’s path toward institutional recognition has been gradual, requiring both regulatory clarity and infrastructure improvements.
The launch of spot ETFs in January 2024 created a new on-ramp for traditional allocators, and subsequent approvals across national platforms have since accelerated the process. Hougan described the transition as occurring “brick by brick,” as Bitcoin gains a foothold in professional investment strategies.
Outlook for the Next Decade
Looking ahead, Bitwise forecasts that BTC will not only outperform but stand apart from traditional assets in terms of expected returns. The firm projects a 28.3% CAGR over the next decade, significantly higher than the long-term expectations placed on equities, bonds, and private credit by leading Wall Street institutions.
At the same time, while volatility is expected to remain elevated relative to other asset classes, Bitwise anticipates a steady decline as market depth expands and liquidity continues to improve.
The implications of such a forecast extend beyond performance projections. A consistent inclusion of BTC in LTCMAs could formalize its role in balanced portfolios, shaping how pensions, endowments, and wealth managers approach diversification.
Hougan cautioned that while risks remain, the framework is designed to give professional allocators a basis for strategic decision-making rather than a speculative outlook.
Featured image created with DALL-E, Chart from TradingView
