Bitwise raises bitcoin price target to $1.6M by 2036

What happened

Bitwise Asset Management released its 2027 Bitcoin Long-Term Capital Market Assumptions this week, raising its base-case price target for bitcoin in 2036 to $1.6 million from $1.3 million in the prior year's forecast. The new target implies annualized returns of 34.3% from bitcoin's price of roughly $83,557 as of September 30, 2026. The firm also provided bear and bull case scenarios of $130,686 and $3.67 million respectively.

The forecast rests on three main pillars. First, Bitwise expects institutional investors to continue adding bitcoin to their portfolios at increasing rates. Second, the firm notes that bitcoin's supply remains fixed on a predictable schedule, with roughly $14 billion in new coins issued annually. Third, Bitwise argues that rising government debt will push investors toward assets that cannot be printed, positioning bitcoin alongside gold as a hedge against currency debasement.

Bitwise estimates that institutions controlling approximately $147 trillion globally could allocate between 1% and 5% of their portfolios to bitcoin over the coming decade. This range implies potential purchases of $1.5 trillion to $7.4 trillion, vastly exceeding the annual new supply. The firm's valuation framework projects the combined store-of-value market for gold and bitcoin will reach $109.8 trillion by 2036, with bitcoin capturing 25% of that total.

Why it matters

Bitwise's revised forecast signals growing confidence in bitcoin's mainstream adoption among professional investors. The $300,000 increase from the prior year reflects what the firm describes as meaningful progress in regulatory clarity, institutional infrastructure, and demand for hard assets. With U.S. spot bitcoin exchange-traded products holding approximately $108 billion and banks expanding custody and trading services, the institutional plumbing for large-scale allocation is already expanding. A Federal Reserve proposal to ease bank custody rules could further widen access for institutional investors if adopted.

Background

Bitcoin's price volatility has long been a focal point for institutional investors. Over the past year, bitcoin fell 53.4% from an October 2025 peak of $126,080 to a June 2026 low of $58,717. Bitwise characterizes this drawdown as the shallowest in bitcoin's history, notably smaller than prior cycle declines of 77%, 84%, and 86%. However, disagreement persists about what this means for the asset's future. While Bitwise expects the historic four-year cycle to weaken as the investor base broadens, other analysts argue the cycle remains intact. VanEck points to historical halving patterns, Fidelity has suggested a possible floor around November 2026, and NYDIG has modeled potential declines to $38,000 to $39,000 if earlier bear market patterns repeat.

Bitcoin's correlation with gold has strengthened significantly. Bitwise reported that this correlation reached a record 0.58 in September 2026 and expects the relationship to deepen, reinforcing bitcoin's positioning as a store-of-value asset. Recent research supports a broader narrative of market maturation. Grayscale's research head put one-year volatility at 43%, lower than the 19% of S&P 500 companies and well below bitcoin's 10-year average of 64%. Deutsche Bank analysts have interpreted the trend as a sign of a maturing market, though Schwab's research noted that bitcoin remains prone to sharp drawdowns despite the lower readings.

What is still unclear

Bitwise's forecast depends heavily on several variables that remain uncertain. The firm acknowledges that bitcoin's track record is short, with software development occurring in 2008 and 2009, public exchange trading beginning in 2010, the first institutional product launching in 2014, and spot exchange-traded products arriving only in 2024. Forecasts built on such limited history carry inherent uncertainty, as future returns may diverge substantially from past performance. Additionally, the firm notes that regulatory progress is not guaranteed, citing the failure of the Clarity Act in Congress as an example of stalled momentum.

What to watch

Several developments could materially alter Bitwise's investment thesis. Quantum computing and AI-driven mathematical advances pose potential threats to the cryptography securing bitcoin wallets, according to the firm. Bitwise indicates that the bitcoin network will require a major upgrade at some point to address these risks, and holders who fail to move funds to new addresses could face exposure. While developers have made progress over the past year, major issues remain unresolved. Regulatory reversal represents another watch point, particularly if political shifts reverse recent institutional-friendly policy advances. Finally, gold's performance could affect bitcoin, since the strengthening correlation means weakness in gold demand could remove tailwinds bitcoin has recently gained from the same investor base.

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