Bitcoin lost more than half its value between its October 2025 peak and its June 2026 low, according to ** Bitwise’s latest report**.
Bitwise responded by raising its long-term price target.
Last year, the firm projected $1.3 million per Bitcoin by 2035. Its new 2027 Bitcoin Long-Term Capital Market Assumptions, published in October 2026, put the base case at approximately $1.6 million by 2036.
The report’s implied annualized return rises from 28.3% to 34.3%.
Those numbers will travel quickly. Someone will post the target. Someone else will dismiss it as marketing. A third person will multiply their Bitcoin balance by $1.6 million and mentally retire.
I wanted to understand what actually produces the number.
So I went through the report’s valuation framework, supply assumptions, institutional adoption thesis, volatility estimates, and risk disclosures. Then I rebuilt the arithmetic using its published inputs.
One finding stood out: approximately 82% of the base-case valuation comes from a single row in the model: Bitcoin’s projected role in the store-of-value market.
That row assumes a market worth nearly $110 trillion and assigns Bitcoin a 25% share.
The entire forecast becomes much easier to understand once you see that dependency. Bitwise is making a huge bet on how people will choose to preserve wealth over the next decade.
It is a compelling thesis. It also deserves more scrutiny than a screenshot of a seven-figure price target.
One detail before we begin: the report calculates its returns from $83,557 on September 30, 2026. That is its reference price, not a live quote. And the new target extends the horizon by a year, from 2035 to 2036. Comparing the two headline targets without those details gives an incomplete picture.
First GPUs. Then memory. Then power. Now the suits think expensive debt will kill AI. Always bet on the engineers.
Bitwise’s argument begins with a familiar problem that becomes harder to ignore as the numbers grow: governments have made promises that are increasingly expensive to finance.
The report cites U.S. federal debt of $40.2 trillion at the end of September 2026, up from $19.6 trillion a decade earlier. It also cites approximately $1.1 trillion in annual interest costs and a fiscal 2026 deficit of about $2 trillion.
** The Congressional Budget Office’s September budget review** supports that approximate deficit figure, estimating a $218 billion increase from fiscal 2025.
For savers, the concern is practical. If debt service consumes more public resources, governments face difficult choices involving taxes, spending, borrowing, growth, and monetary conditions. Bitwise expects the political incentives to favor policies that erode the purchasing power of money over time.
You do not need a wheelbarrow of banknotes to understand that concern. A family can lose confidence in cash as a long-term savings vehicle while supermarkets remain open, salaries continue arriving, and the financial system continues functioning.
The report explicitly avoids assuming hyperinflation. Its thesis is that continued fiscal pressure can sustain demand for assets whose supply governments cannot expand at will.
There is a necessary qualification: high debt does not mechanically produce money creation, and money creation does not mechanically produce a higher Bitcoin price.
Governments can adjust policy. Productivity can improve. Inflation can fall. Higher real interest rates can make interest-bearing assets more attractive and pressure Bitcoin, even while debt remains enormous.
Fiscal stress supplies a reason to consider alternatives. Bitcoin still has to earn the demand.
Against that backdrop, Bitwise places an asset with a radically different issuance policy.
The report estimates that 20.1 million Bitcoin were already circulating, approximately 95.7% of the eventual 21 million limit. It puts annual supply growth at about 0.8%, falling to around 0.4% after the 2028 halving and 0.2% after the 2032 halving.
Under Bitcoin’s existing consensus rules, a higher price cannot persuade the network to raise its subsidy. An investment committee can approve a larger allocation. The issuance schedule does not respond by supplying more coins.
That distinction matters. For many commodities, sustained high prices encourage additional production. Bitcoin’s scheduled issuance is largely insensitive to price.
At the report’s reference price, its estimate of roughly $14 billion in annual new issuance is reasonable. Approximately 164,250 new coins per year, using the expected block interval and the current subsidy, would be worth about $13.7 billion at $83,557 each.
But those new coins are only one source of supply available to buyers.
Existing holders can sell. Funds can experience redemptions. Traders can reduce exposure. An owner who refused to sell at one price may happily sell at another.
Scarce issuance can amplify changes in demand. It does not remove sellers from the market.
The dollar value of future issuance also changes with price. The report’s $14 billion figure is a snapshot, not a fixed dollar ceiling for the next ten years.
That makes the underlying argument stronger when stated precisely: sustained buying must compete for a supply whose creation rate cannot expand in response, while the willingness of existing holders to sell remains crucial.
Businesses aren’t broken—the market is just running out of cash to fund Uncle Sam, the AI boom, and a squeezed public at once. Until the Fed steps in.
Bitwise connects that supply constraint to a very large potential buyer base.
It cites $147 trillion in assets and suggests allocations of 1% to 5% could represent approximately $1.5 trillion to $7.4 trillion of Bitcoin demand over time.
There is an important detail in the underlying source. ** Boston Consulting Group’s $147 trillion figure** describes
It is also already invested. These are portfolios with mandates, liabilities, regulations, and clients. They are not cash waiting beside a Bitcoin buy button.
Still, the scale matters. A small change in the allocation practices of a vast industry can be consequential for a much smaller asset.
The report cites $108 billion in U.S. spot Bitcoin ETP assets. That provides evidence that a substantial investment channel exists. But assets under management combine flows and price changes; they cannot be treated as a measure of fresh institutional buying.
Nor does a future 1% portfolio weight tell us exactly how many new dollars must arrive. Existing positions can appreciate toward that weight. Funds may rebalance. Some investors already hold Bitcoin through other channels.
The most interesting development is the gradual removal of practical obstacles: approved products, custody arrangements, compliance procedures, and platforms through which advisers can act.
Read that matrix carefully. Trading, custody, tokenization, and payments are different businesses. A bank can earn fees from crypto services without taking a substantial directional Bitcoin position.
The infrastructure can make adoption easier. Actual allocation decisions determine whether that opportunity becomes demand.
Bitwise uses a total addressable market model.
In plain English, it estimates the future size of markets Bitcoin might serve, assigns Bitcoin a share of each, adds those values, and divides by 21 million coins.
