Asset management firm Bitwise has significantly raised its long-term valuation forecast for Bitcoin, setting a 2036 target price of $1.6 million.
This revision signals a notable increase in the institution's confidence regarding Bitcoin's potential as digital gold, with its core logic rooted in Bitcoin's ability to successfully capture market share from traditional precious metals.
Compared to its previous target of $1.3 million, this upward adjustment reflects Bitwise's latest assessment of the macroeconomic environment and the evolving nature of the asset, asserting that Bitcoin's current market position is stronger than at any point in history.
The Total Addressable Market Model as the Core Valuation Tool
The Total Addressable Market (TAM) model adopted by Bitwise is the central instrument for deriving this valuation. The model first defines the various sub-markets that Bitcoin could potentially penetrate, then applies specific penetration rate assumptions, and finally performs a reverse calculation based on the fixed total supply of 21 million coins.
According to data compiled by Woofun AI, within the $33.6 trillion total market estimated by Bitwise, the store-of-value segment alone is valued at a massive $27.5 trillion, accounting for 82% of the projected total value in 2036.
This means the $1.6 million target price is heavily dependent on whether Bitcoin can capture a quarter of the store-of-value market that competes with gold.
The Store-of-Value Market as the Dominant Valuation Driver
Specifically, Bitwise projects that by 2036, the combined market shared by gold and Bitcoin will expand from the current $31.1 trillion to $109.8 trillion. Under the most optimistic scenario, Bitcoin would hold a 25% share of that market.
By comparison, based on a baseline price of $83,557, the total market capitalization of the 20.1 million Bitcoins in circulation stands at approximately $1.7 trillion, representing only about 5% of the current $31.1 trillion market.
The remaining six markets covered by the model, including institutional investment portfolios and national treasury reserves, have a combined total value of just $6 trillion, further underscoring the weight of the store-of-value market in the valuation.
Shifting Correlation Between Bitcoin and Gold
It is worth noting that the correlation between Bitcoin and gold is undergoing a structural change. On September 11, the 90-day correlation between the two hit a record 0.58, indicating an increasingly close relationship.
The Bitwise report points out that as the market's understanding of Bitcoin's store-of-value function deepens, this correlation is expected to persist and strengthen. The model predicts that the correlation will rise to 0.21 over the next decade, compared to an average correlation of just 0.11 over the previous 10 years. It should be noted that the former is a 90-day rolling figure while the latter is a ten-year daily average, so the two are not directly comparable.
Downside Risks and Bearish Scenario
However, risks do exist. In the most pessimistic scenario, if Bitcoin's share of the store-of-value market drops to 2.5% and its share of other markets falls to zero, the BTC price in 2036 would be $130,686, corresponding to an annualized return of 4.6%.
In addition, quantum computing, mathematical advances driven by artificial intelligence, and regulatory policy reversals are viewed as the primary risks.
Although Bitwise's projected annualized return of 34.3% is far higher than JPMorgan's 10% forecast, Jim Cramer still favored gold as a safe-haven tool this month. Bitcoin is currently trading at $79,902, down 1.12% within 24 hours.
The Decade Ahead and the Battle Over Bitcoin's Ultimate Form
From a long-term perspective, the biggest variable in Bitcoin valuation models lies in the extent to which gold's function migrates to digital assets. Bitwise's decision to raise its 10-year target from $1.3 million to $1.6 million is not merely a revision of price expectations but a bet on the redefinition of an asset class.
If Bitcoin fails to achieve the expected penetration into the $27.5 trillion store-of-value market, its valuation logic will face a fundamental challenge.
This divergence also reflects differing institutional understandings of Bitcoin's ultimate form: whether it will function as an independent high-growth asset or as a digital substitute for gold. Over the next decade, the evolution of the correlation coefficient will serve as a key indicator for validating this hypothesis.
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