JPMorgan Puts Bitcoin Projected Excess Return at 38.1%, More Than Equities, Govt Bonds, and Real Estate

Investment banking giant J.P. Morgan believes Bitcoin’s projected excess return sits at a massive 38.1%.

Bitcoin has grown massively to secure its position as one of the most sought-after risk assets in today’s financial scene. The asset class, which previously attracted disdain at inception, has caught the attention of governments across the globe. Recently, a J.P. Morgan report posited that BTC has an expected excess return greater than any risk asset.

Ryan Selkis, CEO and founder of crypto intelligence products provider Messari, disclosed the J.P. Morgan report. “Bitcoin is the TINA trade of the next few years. Highest projected excess return asset class according to JPMorgan,” Selkis said in a tweet Wednesday as he shared a shot of the report.

Bitcoin is the TINA trade of the next few years.

Highest projected excess return asset class according to…<checks notes>…JPMorgan. pic.twitter.com/5YHAA8quec

— Ryan Selkis ? (@twobitidiot) September 28, 2022

According to the report, Bitcoin has a projected excess return rate of 38.1%, making it the asset with the highest expected excess return on the list. Additionally, per the report, Bitcoin’s benchmark weight sits at 0.1%, with a massive volume of 83.6%. 

Other asset classes on the list include global equities with a rate of 20.1%; private equity which has a rate of 21.0%; hedge funds, having a rate of 10.4%; private debt, with a rate of 5.6%. Amongst all asset classes assessed, global government bonds have the lowest projected excess return, which sits at a meager 2.1%.

J.P. Morgan noted that its assessment of return volatilities had been based on the asset classes’ monthly annualized volatility since 2015. Additionally, the investment bank based its benchmark weight on the valuation weights of the asset classes.

The projected excess return rate posits the rate at which the return on investment of an asset class is likely to exceed the return expected by most investors and analysts in the market.

JPMorgan’s Stance on Bitcoin

While several JPMorgan reports have revealed massively bullish metrics for Bitcoin, the CEO of the investment banking giant Jamie Dimon has not been the biggest fan of Bitcoin and cryptocurrencies. In June – when the markets were heading to the worst stage of the cycle yet – Dimon noted that he saw a major dip for top crypto assets.

Furthermore, Dimon is known for his regular swipes at Bitcoin and other crypto assets and has created the image of a crypto critic over the years. As previously reported, Dimon called Bitcoin worthless last year in a comment that sparked reactions within the community.

The 66-year-old American billionaire businessman dubbed Bitcoin “a terrible store of value” in 2014 when the asset was trading at the $700-mark. Despite Bitcoin’s meteoric rise since then, Dimon has not changed his opinion. Speaking at a Congressional hearing last week, he asserted that crypto assets such as Bitcoin is “decentralized Ponzi schemes.”

Despite Dimon’s comments, JPMorgan as an institution is seemingly bullish on Bitcoin. Sometime in June, following the coldest points of the Crypto Winter, JPMorgan strategists forecasted a soon-to-be end to the crypto bear market.