CF Benchmarks, a wholly owned subsidiary of Kraken, stated on Thursday that institutional investors are increasingly analyzing bitcoin through the lens of portfolio construction rather than short-term price cycles. The firm models a base price of $1.4 million in 2035.
In its 42-page report, titled “Building Bitcoin Capital Market Assumptions: A Practitioner’s Framework for Strategic and Tactical Allocations,” the UK-based, FCA-regulated benchmark administrator argued that bitcoin can be evaluated using the same capital market assumptions applied to traditional assets, including expected returns, volatility and correlation.
This shift reflects growing institutional participation as regulated markets become available, deeper liquidity in spot and derivatives markets and improved regulatory clarity, according to the firm.
A portfolio-based approach to bitcoin
Rather than offering short-term price calls, CF Benchmarks uses multiple valuation frameworks to assess bitcoin’s long-term role in diversified portfolios. These models include comparative valuation against other stores of value, production economics linking market price to mining costs, and analysis of bitcoin’s sensitivity to global liquidity conditions.
Taken together, CF Benchmarks said these approaches suggest bitcoin’s value is supported by its growing share of the global store of value market, its fixed supply schedule and its response to monetary conditions. As institutional participation increases, the company expects volatility to decrease over time while correlations with traditional asset classes remain relatively low, increasing diversification potential.
Long-term price scenarios up to 2035
Using this framework, CF Benchmarks derived a range of long-term valuation results for bitcoin through 2035, based on various adoption paths.
In its most conservative scenario, the firm modeled a bear case where bitcoin continues to gain market share at its historic pace, capturing about 16% to 33% of gold’s market value. Under this scenario, CF Benchmarks estimated a bitcoin price of around $637,000 in 2035.
Its base case assumes wider institutional adoption and faster growth, with bitcoin reaching about a third of gold’s market value. The probability-weighted scenario implies a cost of about $1.42 million in 2035, according to the report.
In a more optimistic bull case, CF Benchmarks modeled bitcoin becoming the dominant global store of value, surpassing the market value 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 price outcomes, CF Benchmarks said its simulations suggest that a strategic allocation of around 2% to 5% to bitcoin could meaningfully improve portfolio performance. In these models, bitcoin’s high expected returns, declining volatility, and low correlations with stocks and bonds expanded the efficient frontier, enabling higher return targets at comparable or lower levels of risk.
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 results tied to adoption dynamics and macroeconomic conditions rather than short-term market sentiment.
