CF Benchmarks, a wholly owned subsidiary of Kraken, said Thursday that institutional investors are increasingly analyzing 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 Practitioner’s Framework for Strategic and Tactical Allocations,” the UK-based and FCA-regulated trustee argued that bitcoin can be valued using the same capital market assumptions applied to traditional assets, including expected returns, volatility and correlations.
This change reflects increasing institutional participation as regulated markets become accessible, greater liquidity in cash and derivatives markets and improved regulatory clarity, according to the company.
A wallet-based approach to bitcoin
Instead of offering short-term price calls, CF Benchmarks applies multiple valuation frameworks to evaluate the long-term role of Bitcoin in diversified portfolios. These models include benchmarking against other stores of value, production economics that relate market price to mining costs, and analysis of bitcoin’s sensitivity to global liquidity conditions.
Overall, 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 expects volatility to decrease over time, while correlations with traditional asset classes will remain relatively low, enhancing diversification potential.
Long-term price scenarios until 2035
Using these frameworks, CF Benchmarks derived a range of long-term valuation outcomes for Bitcoin through 2035, based on different adoption pathways.
In its most conservative scenario, the company modeled a bearish scenario in which bitcoin continues to gain market share at its historical pace, capturing approximately 16-33% of gold’s market cap. In this scenario, CF Benchmarks estimates the price of Bitcoin to be around $637,000 by 2035.
Its base case scenario assumes broader institutional adoption and faster growth, with bitcoin reaching about a third of the market capitalization of gold. This probability-weighted scenario implies a price tag of about $1.42 million by 2035, according to the report.
In a more optimistic bullish scenario, CF Benchmarks modeled Bitcoin becoming the dominant global store of value, surpassing the market capitalization of gold. This scenario predicted 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 around 2-5% to bitcoin could significantly improve portfolio efficiency. In these models, Bitcoin’s high expected returns, lower volatility, and low correlations with stocks and bonds have widened the efficient frontier, allowing for higher return targets at 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 part of long-term portfolios, with valuation outcomes tied to adoption dynamics and macroeconomic conditions rather than short-term market sentiment.
