Standard Chartered: Replacing Tesla with Bitcoin in the Mag7
Standard Chartered proposes replacing Tesla with Bitcoin in the Mag7 index to increase returns and reduce portfolio volatility.
Investors could consider the first cryptocurrency as part of their technology portfolio, according to the bank's analysts.
Standard Chartered has concluded that replacing Tesla shares with Bitcoin in the Mag7 technology index would bring higher returns and make investors' portfolios less volatile, writes The Block. The hypothetical index with Bitcoin (BTC) in place of Tesla (TSLA) has been named Mag7B by the bank's analysts.
"Over the past seven years, Mag7 portfolios would benefit from the inclusion of BTC and the exclusion of TSLA," Jeffrey Kendrick, head of digital asset research at Standard Chartered, wrote in a report.
Standard Chartered swaps Tesla for bitcoin in 'Mag 7' test, finds higher returns and lower volatility https://t.co/o5resQm74r
Bitcoin is "almost always" more related to the NASDAQ than to gold in the short term, and this correlation suggests that it could be included in a basket of large technology stocks, Kendrick explained.
The Mag7 index includes Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta and Tesla. Kendrick's Mag7B excludes Tesla - currently the company with the smallest market capitalisation in the index - and replaces it with Bitcoin to test whether BTC can be considered a technology company and a hedge against the risks and challenges of traditional finance. The report points out that Bitcoin has a valuation of $1.7 trillion, while Tesla is valued at $800 billion.
"We found that Mag7B has higher returns and lower volatility than Mag7, suggesting that investors could consider BTC both as a hedge against traditional finance (TradFi) and as part of their technology portfolio. With the role of BTC in global portfolios increasingly established, we believe its multiple use cases will attract new capital into the asset. This is especially true with the growing institutionalisation of Bitcoin investments," Kendrick explained.
Bitcoin's growing role in investors' wallets and institutional adoption
Kendrick added that Bitcoin's inclusion would be even more beneficial this year. Since the launch of the ETF on Bitcoin in early 2024, he said, trading Bitcoin has become as easy and cheap as trading other stocks in the Mag7.
He also highlighted changes in the way Bitcoin is traded. Since President Donald Trump's inauguration in January 2025, he said, Bitcoin's volatility-adjusted behaviour has been similar to that of Nvidia, while Tesla now behaves more like Ethereum.
"We believe that BTC should be seen as a multifunctional tool in investors' portfolios; this will open the door to even larger institutional purchases," Kendrick said.
In January, the bank's analyst had said that capital inflows into Bitcoin in 2025 will exceed those in 2024, with new capital likely to come from long-term investors such as pension funds. Standard Chartered predicts that, in this context, the price of Bitcoin will reach $200,000 by the end of the year.
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Investors could consider the first cryptocurrency as part of their technology portfolio, according to the bank's analysts.
Standard Chartered has concluded that replacing Tesla shares with Bitcoin in the Mag7 technology index would bring higher returns and make investors' portfolios less volatile, writes The Block. The hypothetical index with Bitcoin (BTC) in place of Tesla (TSLA) has been named Mag7B by the bank's analysts.
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Bitcoin is "almost always" more related to the NASDAQ than to gold in the short term, and this correlation suggests that it could be included in a basket of large technology stocks, Kendrick explained.
The Mag7 index includes Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta and Tesla. Kendrick's Mag7B excludes Tesla - currently the company with the smallest market capitalisation in the index - and replaces it with Bitcoin to test whether BTC can be considered a technology company and a hedge against the risks and challenges of traditional finance. The report points out that Bitcoin has a valuation of $1.7 trillion, while Tesla is valued at $800 billion.
Bitcoin's growing role in investors' wallets and institutional adoption
Kendrick added that Bitcoin's inclusion would be even more beneficial this year. Since the launch of the ETF on Bitcoin in early 2024, he said, trading Bitcoin has become as easy and cheap as trading other stocks in the Mag7.
He also highlighted changes in the way Bitcoin is traded. Since President Donald Trump's inauguration in January 2025, he said, Bitcoin's volatility-adjusted behaviour has been similar to that of Nvidia, while Tesla now behaves more like Ethereum.
In January, the bank's analyst had said that capital inflows into Bitcoin in 2025 will exceed those in 2024, with new capital likely to come from long-term investors such as pension funds. Standard Chartered predicts that, in this context, the price of Bitcoin will reach $200,000 by the end of the year.
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