Standard Chartered’s ’Mag 7B’ Index Swaps Tesla for Bitcoin to Enhance Performance
Standard Chartered has introduced a hypothetical index named ’Mag 7B’, which replaces Tesla (TSLA) with Bitcoin (BTC) to mirror high-growth tech stocks and use Bitcoin as an inflation hedge. The bank’s analysis reports that substituting Tesla with Bitcoin yields a 5% increase in returns and a 2% reduction in volatility, compared to the original ’Magnificent 7’ index. This shift signifies Bitcoin’s growing correlation with tech stocks, promising stronger potential returns. The decision reflects an adaptation strategy in light of Tesla’s current challenges in the EV market, aiming for a more stable, growth-oriented portfolio. While this may affect investor sentiment regarding Tesla, a major impact on Tesla’s stock is unlikely unless a significant shift from traditional EV investments to cryptocurrencies and tech assets occurs. Moreover, CryptoQuant highlights significant Bitcoin price levels related to liquidation risks, coinciding with BlackRock’s launch of a Bitcoin ETP in Europe, indicating broader institutional interest.
Bullish
Replacing Tesla with Bitcoin in Standard Chartered’s ’Mag 7B’ index underscores Bitcoin’s rising status as a tech asset, showing its increased correlation with such stocks and potential for high returns. This move could boost Bitcoin’s visibility and appeal among institutional investors, potentially driving demand. By aligning Bitcoin with high-growth tech equities, the index positions Bitcoin as a more mainstream investment vehicle, likely fostering a bullish sentiment in the market. Moreover, the broader institutional interest, highlighted by a Bitcoin ETP launch in Europe, signals growing acceptance which could further support a rise in Bitcoin’s value in both short and long term.