Bitcoin's Stunning $1.4 Million Price Target by 2035: How Institutions Are Redefining Portfolio Strategy

CF Benchmarks, a subsidiary of Kraken, has released a groundbreaking report that positions bitcoin as a core component of institutional portfolios, projecting a base-case price of $1.4 million by 2035. This analysis shifts the focus from short-term speculation to long-term valuation frameworks, reflecting growing institutional adoption.

A Portfolio-Based Approach to Bitcoin

Instead of making near-term price calls, CF Benchmarks applies capital market models traditionally used for assets like stocks and bonds. The firm argues that bitcoin can be evaluated based on expected returns, volatility, and correlations, similar to traditional investments. This shift is driven by increased institutional participation, deeper liquidity in spot and derivatives markets, and improving regulatory clarity.

The report, titled "Building Bitcoin Capital Market Assumptions: A Practitioner's Framework for Strategic and Tactical Allocations," uses multiple valuation frameworks:

• Comparative valuation against other stores of value, such as gold.
• Production economics linking market price to mining costs.
• Analysis of bitcoin's sensitivity to global liquidity conditions.

Together, these approaches suggest that bitcoin's value is supported by its expanding share of the global store-of-value market, its fixed supply schedule, and its responsiveness to monetary conditions. As institutional adoption grows, volatility is expected to decline, while correlations with traditional assets remain low, enhancing diversification potential.

Long-Term Price Scenarios Through 2035

CF Benchmarks outlines three valuation scenarios for bitcoin through 2035, based on different adoption paths:

• Bear Case: Bitcoin captures 16% to 33% of gold's market capitalization, leading to a price of about $637,000 by 2035.
• Base Case: Broader institutional adoption with bitcoin reaching roughly one-third of gold's market cap, implying a price of around $1.42 million by 2035.
• Bull Case: Bitcoin becomes the dominant global store of value, surpassing gold's market cap, with a projected valuation of nearly $2.95 million by 2035, driven by accelerated institutional and sovereign adoption.

Implications for Institutional Portfolios

Beyond price projections, the report highlights that a strategic allocation of 2% to 5% to bitcoin could significantly improve portfolio efficiency. Bitcoin's high expected returns, declining volatility, and low correlations with equities and bonds expand the efficient frontier, allowing for higher returns at comparable or lower risk levels.

CF Benchmarks emphasizes that as regulatory clarity improves, investors are likely to focus more on disciplined allocation, rebalancing, and risk management frameworks, rather than speculative narratives. This positions bitcoin as an asset that can be modeled as a long-term portfolio component, with valuation tied to adoption dynamics and macroeconomic conditions.