Mag 7 Profits to Increase If Bitcoin Replaces Tesla: StanChart

According to the bank's head of digital asset research, Bitcoin can be viewed as a tool that serves multiple functions in the technology portfolio, which contributes to increased institutional buying.

Christian Sandor | Edited by Steven Alpher Updated Mar 24, 2025 18:54 UTC Published Mar 24, 2025 16:52 UTC

What is important to know:

• A Standard Chartered report stressed that investors should view Bitcoin as a tech stock rather than digital gold due to its stronger correlation with the Nasdaq.
• The paper proposes updating the “Magnificent Seven” of tech stocks by replacing Tesla with BTC, which would provide higher returns and lower volatility on average over the past seven years.
• Some asset managers support the idea of including BTC in investment portfolios for diversification, with BlackRock advising up to 2% in traditional stock and bond portfolios.

While Bitcoin (BTC) supporters typically view the world's largest cryptocurrency as a digital alternative to gold, a new report from global bank Standard Chartered argues that investors should view it more as a tech stock with a number of additional benefits.

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StanChart’s team, led by Jeff Kendrick, noted that Bitcoin’s correlation with the Nasdaq has “almost always” been stronger than its correlation with gold, a traditional safe-haven asset. While BTC could serve as a safe haven in times of financial instability, such as a regional banking crisis in 2023 or potential US debt problems, the real need for such hedges rarely arises, so its behavior increasingly resembles that of traditional tech stocks.

“Investors may view BTC as a hedge against traditional finance and as part of their tech allocation,” Kendrick said. However, he said, “in the short term, BTC may be more appropriate to view as a tech stock than as a hedge against TradFi issues.”

Continuing the idea of Bitcoin as a tech portfolio element, the report proposed a rethink of the so-called Magnificent 7 (Mag 7) index of large tech companies that have recently outperformed the overall market, including Apple, Alphabet, Microsoft, Nvidia, Amazon, Meta, and Tesla (TSLA). The new “Mag 7B” index would replace Tesla with Bitcoin.

The result? Mag7B has delivered higher risk-adjusted returns than the original cohort over the past seven years, highlighting the importance of BTC in a tech portfolio, Kendrick argues. Mag7B has outperformed Mag7 by about 1% on average, with nearly 2% less annualized volatility, a significant advantage for institutional investors and large asset managers, he added.