CF Benchmarks, a wholly owned subsidiary of Kraken, stated Thursday that institutional investors are increasingly looking at bitcoin through the lens of portfolio construction rather than short-term price cycles. The company models a base price of $1.4 million by 2035.
In its 42-page report, titled “Building Bitcoin Capital Market Assumptions: A Professional Framework for Strategic and Tactical Allocations,” the UK-based FCA-regulated benchmark manager argued that bitcoin can be valued using the same capital market assumptions applied to traditional assets, including expected returns, volatility and correlations.
That shift reflects growing institutional participation as regulated markets become accessible, greater liquidity in spot and derivatives markets, and greater regulatory clarity, according to the firm.
A wallet-based approach to bitcoin
Rather than offering short-term price calls, CF Benchmarks applies multiple valuation frameworks to evaluate bitcoin’s long-term role in diversified portfolios. Those models include comparative valuation with other stores of value, production economics that links market price to mining costs, and analysis of bitcoin’s sensitivity to global liquidity conditions.
Taken together, CF Benchmarks said these approaches suggest that bitcoin’s value is supported by its growing share of the global store-of-value market, its fixed supply schedule, and its responsiveness to monetary conditions. As institutional participation increases, the firm anticipates that volatility will decrease over time, while correlations with traditional asset classes remain relatively low, thereby enhancing diversification potential.
Long-term price scenarios until 2035
Using those frameworks, CF Benchmarks derived a variety of long-term valuation results for bitcoin through 2035, based on different adoption paths.
In its most conservative scenario, the company modeled a bear case in which bitcoin continues to gain market share at its historical pace, capturing approximately 16% to 33% of gold’s market capitalization. Under that scenario, CF Benchmarks estimated a bitcoin price of around $637,000 by 2035.
Its base case assumes broader institutional adoption and faster growth, with bitcoin reaching roughly a third of gold’s market capitalization. That probability-weighted scenario implies a price tag of around $1.42 million by 2035, according to the report.
In a more optimistic bullish case, CF Benchmarks modeled that Bitcoin would become the dominant global store of value, surpassing the market capitalization of gold. That scenario projected a valuation of nearly $2.95 million by 2035, driven by accelerated institutional and sovereign adoption.
Implications for institutional portfolios
Beyond the price results, CF Benchmarks said its simulations suggest that a strategic allocation of approximately 2% to 5% to bitcoin could significantly improve portfolio efficiency. In those models, bitcoin’s high expected returns, decreased volatility, and low correlations with stocks and bonds expanded the efficient frontier, allowing for higher return targets with comparable or lower risk levels.
The firm argued that as regulatory clarity improves and institutional access deepens, investors are likely to focus less on speculative narratives and more on disciplined allocation, rebalancing and risk management frameworks.
Rather than treating bitcoin as an outlier asset, CF Benchmarks’ analysis positions it as an asset that can increasingly be modeled to be a component of long-term portfolios, with valuation outcomes tied to adoption dynamics and macroeconomic conditions rather than short-term market sentiment.
