Bitcoin Outperforms Tesla in Standard Chartereds Magnificent 7 Index

A recent Standard Chartered report reveals that swapping Tesla for Bitcoin in the Magnificent 7 index enhances returns and reduces volatility.

Notably, the Magnificent 7 index traditionally includes stocks of major tech giants, including Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta, and Tesla. However, in the newly devised model, Standard Chartereds Head of Digital Asset Research, Geoffrey Kendrick, removed Tesla, the smallest company in the index by market capitalization of around $800 billion, and replaced it with Bitcoin, which currently boasts a market cap of approximately $1.7 trillion.

According to Kendrick, the decision to substitute the electric manufacturer with Bitcoin was based on Bitcoins increasing role in financial markets.

This tells us that the Mag 7 portfolios would have benefited over the past seven years from adding BTC and excluding TSLA, he stated.

The analysis found that the revised Mag 7B index has outperformed the traditional Mag 7 by about 5% since December 2017. Additionally, the Bitcoin-included index demonstrated nearly 2% lower volatility on average compared to the original lineup. Kendrick emphasized that these findings suggest Bitcoin is not only a hedge against traditional financial risks but also behaves similarly to high-performing technology stocks.

The pundit also pointed out that Bitcoins correlation with the Nasdaq is stronger than its correlation with gold, reinforcing the argument for its classification alongside tech equities.

If it were included, the implication would be more institutional buying as BTC would serve multiple purposes in investor portfolios, he added.

Notably, Bitcoins growing institutional adoption, particularly following the launch of spot Bitcoin ETFs in early 2024, has made trading the cryptocurrency as seamless and cost-effective as dealing in traditional tech stocks.

He also highlighted a notable shift in Bitcoins trading behavior. Since the inauguration of U.S. President Donald Trump in January 2025, Bitcoins price behavior has mirrored Nvidias on a volatility-adjusted basis. In contrast, he noted that Tesla now trades more similarly to Ethereum.

Since the launch of spot ETFs, Bitcoin investment has become more institutionalized, Kendrick noted, adding, We believe BTC should be viewed as a multi-functional instrument in investor portfolios; this will open up the opportunity for even more institutional buying.

That said, Kendrick noted he remains optimistic about Bitcoins near-term prospects, citing its increasing correlation with the stock market, which is rebounding from its worst quarter since mid-2022.

Higher Nasdaq will equal higher Bitcoin. $90,000 in focus now, he said, referencing Bitcoins next major price target.

Bitcoins integration into high-profile investment indices and its performance compared to traditional tech stocks further cement its role in institutional portfolios. As more institutional investors recognize Bitcoins multi-functional utility, its inclusion in mainstream financial indices could become a reality in the future.

At press time, Bitcoin was trading at $87,628, reflecting a 0.36% surge in the past 24 hours.

Text source: ZyCrypto

Bitcoin