Source: VanEck Bitcoin Long-Term Capital Market Assumptions Report; Compiled by: Jinse Finance
Key Takeaways:
Structural Valuation (CAGR 15%): Our base case model predicts that Bitcoin will reach $2.9 million by 2050, primarily due to Bitcoin being used as a settlement currency in 5-10% of global trade and becoming a 2.5% reserve asset on central bank balance sheets.
Strategic Portfolio Allocation: We recommend allocating 1-3% of your diversified portfolio to Bitcoin as a strategic asset. For investors with a higher risk tolerance, our analysis shows that historically, Bitcoin allocations of up to 20% have optimized the Sharpe ratio, thus fully leveraging Bitcoin's convexity return characteristics. Opportunity Cost: Due to the sovereign debt supercycle in developed markets, the risk of zero exposure to the most mature non-sovereign reserve assets may now outweigh the volatility risk of the position itself. As Bitcoin transitions from a fringe speculative asset to a widely accepted institutional monetary instrument, the need for a rigorous Capital Market Assumption (CMA) framework is unprecedented. Investment committees need more than just narratives; they need a quantitative basis for long-term expected returns, volatility, and correlations. Our analysis suggests that while short-term price movements remain dependent on global liquidity cycles and leverage ratios, long-term value accumulation will be driven by the convergence of Bitcoin with the structural flaws of the sovereign debt system. Below, we outline our formal 25-year CMA, based on our 2050 valuation scenario and adjusted for the tactical realities of our 2026 cycle roadmap. Executive Summary: Bitcoin Capital Market Assumptions For long-term asset allocators, our analysis suggests that Bitcoin is a convex, low-correlation reserve asset with a base case CAGR of 15% and offers significant portfolio efficiency advantages. 
Source: VanEck Research, as of December 31, 2025.
I. CMA Framework and Scope
Capital Market Assumptions (CMA) represent expectations of the long-term returns, volatility, and correlations of various assets, providing a basis for strategic asset allocation decisions. Our 25-year CMA for Bitcoin is designed to help institutional investors assess Bitcoin's role in diversified portfolios.
Our framework distinguishes between long-term valuation drivers and cyclical deployment considerations, providing both long-term return assumptions and near-term implementation guidance.
Our framework distinguishes between long-term valuation drivers and cyclical deployment considerations, providing both long-term return assumptions and near-term implementation guidance.
While short-term price volatility remains influenced by liquidity conditions and leveraged positions, our CMA framework is based on long-term adoption and balance sheet dynamics. II. Long-Term Valuation Theory (2026-2050)
Standard stock valuation models (such as discounted cash flow and price-to-earnings ratio) fail to capture the utility of non-sovereign reserve assets like Bitcoin. Our valuation framework focuses on simulating Bitcoin's penetration in two specific Total Potential Markets (TAM): the global medium of exchange (MoE) and central bank reserve assets.
In our base case forecast, we expect the price of Bitcoin to reach $2.9 million per coin by 2050, implying a compound annual growth rate (CAGR) of 15% from current levels.
Bitcoin Valuation Scenario in 2050: Key Assumptions and Price Targets
Note: As of December 31, 2025, the current price of Bitcoin is approximately $88,000. This price is used only as a benchmark for calculating the implied CAGR under the above bear, benchmark, and bull scenarios.
Source: VanEck Research, as of December 31, 2025.
Source: VanEck Research, as of December 31, 2025.
... This 15% annualized return (baseline scenario) is based on two structural inflection points: Shift in settlement methods: We predict that by 2050, Bitcoin will settle 5-10% of global international trade and 5% of domestic trade. Shift in reserves: As confidence in G7 sovereign debt declines, we simulate a scenario where central banks allocate capital to Bitcoin to hedge against fiscal dominance.
Bull Market Scenario ($53.4 million): In a "super-Bitcoinization" scenario, if Bitcoin accounts for 20% of international trade and 10% of domestic GDP, the implied value of each Bitcoin could reach $53.4 million (29% CAGR). This scenario requires Bitcoin to reach or surpass gold's status as the primary global reserve asset, which accounts for nearly 30% of global financial assets.
Current Base Price ($88,000): Our valuation model uses the current price of approximately $88,000 as the base price for the following projections. It is worth noting that our "Bear Market Scenario" target price ($130,000, 2% CAGR) is slightly higher than the current level, indicating that even in a market stagnation and declining product adoption, the asset's value is already reflected in the price.
III. CMA Inputs: Expected Returns, Volatility, and Correlation
To apply these findings to the Mean-Variance Optimization (MVO) model, we distill our research into the following formal inputs:
Expected Returns: We simulate a 15% annualized return driven by asset class monetization (baseline scenario). We also set a 2% bear market return to provide a weighted probability framework for the risk model.
Volatility Assumptions: For long-term capital market assumptions, we use an annualized volatility range of approximately 40% to 70%. This is comparable to the volatility of leading-edge stocks, early-stage technology stocks, or commodity-linked stocks with options. Although the actual volatility in the spot market has occasionally narrowed to around 27% recently (see Part V), a more conservative 40% to 70% assumption is still necessary for effective long-term stress testing.
Expected Returns: We simulate a 15% annualized return (baseline scenario).
Expected Returns: We simulate a 15% annualized return driven by asset class monetization.
Expected Returns: We simulate a 15% annualized return (baseline scenario).
Expected Returns:
Expected Returns:
Expected Returns:
Expected Returns:
Expected Returns:
Correlation Hypothesis: We expect this asset to have a low to moderate correlation with global stocks, bonds, and gold throughout the economic cycle, with occasional convergence during periods of global liquidity tightening. Its most persistent long-term relationship remains a negative correlation with the US Dollar Index (DXY), which reinforces its role as a hedge against currency devaluation.
IV. Correlation Drivers: Liquidity and the US Dollar
For portfolio construction, "why" is far less important than "what." Contrary to the popular notion that Bitcoin is a leveraged tech stock, our regression analysis confirms that it primarily acts as a liquidity sponge.
Global M2 vs. Bitcoin Price Comparison

Source: VanEck Research; Bloomberg, as of November 30, 2025.
Changes in M2 can explain more than 50% of Bitcoin price fluctuations (r2=0.54, F=26).
The change in M2 can explain more than 50% of Bitcoin price fluctuations (r2=0.54, F=26).
Correlation Overview:
Global liquidity is a key signal: Since 2014, the correlation between Bitcoin price and global M2 total value has been 0.43 (r² = 0.19). When conducting multivariate analysis on the top 5 currencies (USD, EUR, CNY, JPY, GBP), we found that changes in M2 can explain more than 54% of Bitcoin price fluctuations (F=26).
Decoupling from the USD: The negative correlation with the US Dollar Index (DXY) is structurally weakening. While this correlation was historically strong (r² = 0.7 from 2014-2020), in the current cycle (t = -13), this correlation has weakened to r² = 0.45.
Global liquidity is a key signal: Since 2014, the correlation between Bitcoin price and global M2 total value has been 0.43 (r² = 0.19).
In the multivariate analysis on the top 5 currencies (USD, EUR, CNY, JPY, GBP), we found that changes in M2 can explain more than 54% of Bitcoin price fluctuations (F=26).
Decoupling from the USD: The negative correlation with the US Dollar Index (DXY) is structurally weakening.
The negative correlation between BTC and DXY will weaken in 2025

Source: VanEck Research; Bloomberg, as of December 31, 2025.
Since 2020, the inverse relationship between Bitcoin and the US dollar (DXY) has eased, indicating that Bitcoin is increasingly affected by global fiscal instability, rather than simply reacting to a strong dollar.
V. Volatility and Market Structure
For institutional models, understanding the source of volatility is just as important as understanding volatility itself.
Data shows that Bitcoin volatility is increasingly driven by structural rather than behavioral factors, primarily through derivatives leverage rather than spot trading. Bitcoin Futures Open Interest and Price [Image of Bitcoin futures open interest and price data] Source: VanEck Research; Bloomberg, as of December 31, 2025. Since October 2020, nearly 73% of Bitcoin price volatility can be explained by changes in BTC futures open interest (t=71).
Leverage Factor: Changes in futures open interest currently have an average impact of 0.68 times on the price of Bitcoin, but this figure can surge to 2.0 times during periods of market volatility. This "reflexivity" means that market volatility is often a mechanical deleveraging event rather than a breakthrough in fundamental theory.
Market Maturity: Actual volatility has shown a structural decline, recently hitting multi-year lows near 27%.
Bitcoin Annualized Average Hourly Return by Trading Hour (Asia/US/Europe)

Source: VanEck Research; Bloomberg, as of December 31, 2025.
Market competition is intensifying. Although the Asian trading session lagged behind the market in 2021, it now leads price discovery, indicating a maturing market structure that operates around the clock.
VI. Tactical Deployment Considerations (2026 Roadmap)
While the long-term trend argument is robust, the actual path is rarely linear.
For investors planning to invest in 2026, we will utilize specific on-chain metrics to manage access risk. 1. “Overheating” Signal: Relative Unrealized Profit (RUP). We closely monitor the Relative Unrealized Profit (RUP) metric. Historically, when the 30-day moving average RUP exceeds 0.70, a tactical cycle top is imminent. Current Status: As of December 31, 2025, Bitcoin's RUP is 0.43, still within the range historically yielding the best 1-2 year returns, indicating we are in the middle of a cycle. High levels of relative unrealized profits (RUP) typically foreshadow price peaks.

Bitcoin forward average yield (RUP) level calculated based on the 30-day moving average (MA)

Source: VanEck Research; Bloomberg, as of December 31, 2025.
Source: VanEck Research; Bloomberg, as of December 31, 2025.

Source: VanEck Research; Bloomberg, as of December 31, 2025.
... **Relative Unrealized Profit (RUP) is a metric in the blockchain space that compares the total unrealized profit of all holders to market capitalization to assess market sentiment and identify potential cycle tops.** 2. Futures Financing Rates **Leverage remains a major driver of short-term volatility. Perpetual futures financing rates consistently above 10% typically indicate overly optimistic market sentiment, which often foreshadows cycle tops.** Current rates (around 4.9%) suggest further upside potential. **VII. Role in Strategic Asset Allocation** Within this framework, Bitcoin is not a tactical trade; its role is as a long-term tool to hedge against adverse monetary policy consequences. **Strategic Allocation:** Our updated analysis recommends a 1-3% strategic allocation within a diversified portfolio. Optimization: For investors with a high risk tolerance, historically, allocations of up to 20% can improve the Sharpe ratio, thus reflecting the asset's unique convexity return characteristics. Our analysis confirms that, due to the asset's unique high convexity and low correlation, small allocations have a significant positive impact on portfolio efficiency. While our CMA (Cost Management Analysis) is forward-looking, historical data also validates this "efficiency" argument. Our research on the impact of Bitcoin allocation on a 60/40 portfolio shows that when position size is strictly controlled, asset-level volatility does not necessarily translate into corresponding portfolio risk. The Impact of Bitcoin Allocation on Traditional 60/40 Portfolios
