Key Insights:
- A report from Standard Chartered argues that Bitcoin should be seen more as a tech stock rather than digital gold, highlighting its closer correlation with the Nasdaq.
- The analysis suggests a reconfiguration of the ‘Magnificent 7’, swapping Tesla for Bitcoin, leading to higher returns and reduced volatility over the last seven years.
- Asset managers are increasingly advocating for Bitcoin in investment portfolios, with BlackRock suggesting a 2% Bitcoin allocation in traditional portfolios.
While Bitcoin (BTC) is typically considered a digital equivalent to gold, Standard Chartered proposes it be regarded similarly to tech stocks due to its benefits and strong market correlation. The report emphasizes that Bitcoin’s alignment with major tech indices may provide better opportunities for investors.
Performance Comparison:
The reimagined ‘Mag 7B’ with Bitcoin replacing Tesla has consistently yielded superior returns and lower volatility when compared to the original index. Such insights may encourage more institutional buying of Bitcoin.
“Investors can view BTC as both a hedge against traditional finance and as part of their tech allocation, yet in the short term, BTC may best be regarded as a tech stock instead of a hedge against financial market issues,” noted Kendrick.
Further, the report highlighted that including Bitcoin in diversified portfolios might enhance investment strategies, paving the way for wider acceptance and allocation by institutional investors.
