Bitcoin Has Been Trading Like a Tech Stock: Standard Chartered

Given the Bitcoin price has a high correlation with the Nasdaq, investors would do well to treat it more as a tech stock than a hedge against volatility in traditional markets, according to Standard Chartered analyst Geoff Kendrick.

To test his theory, Kendrick created a hypothetical “Mag 7B” index, a spin on the Magnificent 7 index, that replaces Tesla with Bitcoin. Normally, the Mag 7 refers to tech giants Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta, and Tesla. And traders who had done so in 2017 would be up 5% now, he concluded.

If you add Bitcoin to the mix, its $1.7 trillion market capitalization makes it the sixth largest among the group. At the time of writing, Bitcoin has been retracing slightly after getting close to retaking $88,000. BTC has gained 3.7% in the past 24 hours, according to CoinGecko data.

There’s more evidence that traders are feeling less uncertain. Open interest in Bitcoin futures contracts has swelled by more than 10% in the past day, according to CoinGlass data.

There are currently $57 billion worth of open Bitcoin derivatives contracts. Earlier this month, when markets were acutely feeling the effects of President Donald Trump’s tariff troubles, that figure had dropped as low as $45 billion.

But now that macroeconomic jitters have eased, traders seem more comfortable buying back into BTC.

If BTC had been swapped into the altered Mag7 index—starting in 2017, when Bitcoin had just hit what was then an all-time high—it would have outperformed the Mag 7 by about 5%, Kendrick writes.

In addition, traders who swapped Bitcoin for TSLA over the past seven years would have seen fewer price fluctuations, as well.

“Perhaps more importantly than returns is Mag 7B’s lower volatility relative to Mag 7 in every year,” he added. “Over the full period, average annualized volatility is almost 2% lower for Mag 7B than for Mag 7.”

Stock correlations have been a hotly contested topic among Bitcoin investors. In the last quarter of 2024, BTC appeared to break away from gold and equities completely and outperformed “every asset class,” NYDIG noted.

“Furthermore, during the period since President Trump’s inauguration on 20 January, BTC has traded like most of the Mag 7 stocks,” Kendrick wrote. “If we compare price declines against [volume] levels over this period, BTC trades in a similar vol-adjusted fashion to NVDA, while TSLA trades a lot like ETH.”

Edited by James Rubin