The firm anticipates declining volatility over time while correlations with traditional assets remain relatively low, enhancing diversification potential.
Bitcoin News
Index provider CF Benchmarks released a 42-page framework Thursday that models Bitcoin through traditional capital market assumptions, projecting a base-case price of $1.4 million by 2035. The Kraken subsidiary applies portfolio construction methods to institutional Bitcoin analysis rather than short-term cycle predictions.
The report derives bear, base, and bull scenarios using comparative valuation against stores of value, production economics linking market price to mining costs, and global liquidity sensitivity analysis. CF Benchmarks argues the approach positions Bitcoin as a measurable portfolio component with valuations tied to adoption dynamics and macroeconomic conditions.
Growing institutional participation through regulated markets, deeper spot and derivatives liquidity, and improving regulatory clarity support the framework's application, according to the FCA-regulated administrator. The firm anticipates declining volatility over time while correlations with traditional assets remain relatively low, enhancing diversification potential.
The bear case model shows Bitcoin capturing 16% to 33% of gold's market capitalization at historical adoption rates, implying roughly $637,000 by 2035. The base scenario assumes broader institutional acceptance with Bitcoin reaching approximately one-third of gold's market cap, supporting the $1.42 million probability-weighted estimate.
A bull case projects Bitcoin surpassing gold's market capitalization through accelerated institutional and sovereign adoption, reaching nearly $2.95 million by 2035. The framework treats each scenario as outcomes driven by varying adoption trajectories rather than speculative projections.
Portfolio simulations suggest strategic allocations of 2% to 5% to Bitcoin could meaningfully improve efficiency. Models depict high expected returns, declining volatility, and low correlations with equities and bonds expanding the efficient frontier, allowing higher return targets at comparable or lower risk levels.
CF Benchmarks positions Bitcoin as increasingly suitable for disciplined allocation, rebalancing, and risk management frameworks as regulatory clarity advances and institutional access deepens. The analysis argues investors will focus less on speculative narratives and more on structured portfolio integration.
The firm states that Bitcoin's value receives support from expanding store-of-value market share, a fixed supply schedule, and responsiveness to monetary conditions. These factors combine with institutional participation trends to inform long-term valuation outcomes independent of short-term market sentiment.
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