Standard Chartered Bank: Bitcoin Replaces Tesla, Higher Returns, Lower Volatility

Standard Chartered Bank recently released a research report, constructing a hypothetical index "Mag 7B," replacing Tesla with Bitcoin, and found that it had higher returns and lower volatility. Since December 2017, Mag 7B has outperformed the original Mag 7 index by 5%, and over the past seven years, Mag 7B's average annual return has been approximately 1% higher. This study suggests that the inclusion of Bitcoin not only enhances portfolio returns but also reduces overall volatility and improves the information ratio.

Mag 7 Index and Its Derivative Mag 7B

The Mag 7 index originally included seven tech giants: Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta (formerly Facebook), and Tesla. To evaluate Bitcoin's role in a tech stock portfolio, Geoff Kendrick, Head of Digital Asset Research at Standard Chartered Bank, created the "Mag 7B" index, replacing Tesla with Bitcoin.

Research results show that since December 2017, Mag 7B has outperformed the Mag 7 index by approximately 5%. Kendrick pointed out that they chose to calculate from late 2017 (when Bitcoin's historical high was near $20,000) to ensure Bitcoin would not gain an unfair advantage from starting at a low point. The study found that over the past seven years, Mag 7B outperformed Mag 7 in five of those years, with an average annual return about 1% higher.

Furthermore, Mag 7B's volatility is lower than Mag 7, with an average annual volatility reduction of nearly 2%. This means that although Bitcoin is typically seen as a highly volatile asset, in this portfolio, it actually reduced overall volatility. Additionally, Mag 7B's average information ratio reached 1.13, whereas Mag 7 was only 1.04. The information ratio measures excess return relative to risk; the higher the ratio, the more efficiently an asset generates returns.

Bitcoin’s Market Positioning and Future Trends

Standard Chartered Bank stated that in the short term, Bitcoin has a higher correlation with Nasdaq than gold, and Bitcoin could be included among major tech stocks. Kendrick said, “If included, it would mean more institutional purchases, as Bitcoin will play multiple roles in investors' portfolios.”

Kendrick pointed out that Bitcoin's market characteristics are increasingly resembling traditional tech stocks rather than safe-haven assets. Since Bitcoin's price is highly correlated with the Nasdaq index, investors should consider it as part of the tech stock sector rather than a tool for hedging traditional market fluctuations.

Notably, after the launch of spot Bitcoin ETFs in early 2024, Bitcoin's trading patterns have changed, and trading Bitcoin is now as convenient as trading Mag 7 stocks. Kendrick also noted that since Donald Trump took office as President in January 2025, Bitcoin's volatility-adjusted behavior has become more similar to Nvidia, while Tesla's current trading pattern is more akin to Ethereum.

Looking ahead, Kendrick believes that institutional demand for Bitcoin will continue to grow and that it will play a more significant role in investment portfolios. He further stated, "We believe BTC should be regarded as a multi-purpose asset in investors' portfolios, which will further drive institutional purchases."

At the time of writing, Bitcoin's price was $86,460. According to data from bosswallet, BTC has risen 2.67% in the past 24 hours.

Recent Market Trends and Outlook

The sentiment in the Bitcoin market also reflects a decline in investor uncertainty. According to CoinGlass data, open interest in Bitcoin futures has increased by more than 10% in the past 24 hours, with the total value of open Bitcoin derivatives contracts reaching $56 billion, compared to $45 billion earlier this month when concerns over the Trump administration's tariff policies weighed on the market. As macroeconomic tensions ease, traders are returning to the Bitcoin market.

From a technical perspective, according to Barchart data, Bitcoin's 50-day moving average (MA50) is at $93,486.93, while the 100-day moving average (MA100) is at $94,175.98, indicating an overall bullish trend.

Regarding the short-term outlook, Kendrick expects that as the U.S. government’s tariff policy announcement on April 2 is anticipated to be milder than expected, the Nasdaq index may rebound, driving Bitcoin prices higher. He noted, "A Nasdaq rally usually means a Bitcoin rally. The target now is $90,000."

Conclusion

Overall, Standard Chartered Bank's research further confirms that Bitcoin can serve as a strong complement to tech stock portfolios, improving overall returns while reducing volatility.

As market conditions evolve and institutional investors continue to enter, Bitcoin's position in the global financial market will become increasingly important. Choosing the right trading platform is crucial—visit XBIT Exchange now and start your crypto asset trading journey!

Disclaimer

This article is for informational purposes only and does not constitute investment advice. The views expressed in this article represent only those of the cited authors and do not reflect the views of our company. Before making any investment decisions, readers are advised to conduct thorough research and risk assessment. Our company is not responsible for any investment losses.