While the proponents of Bitcoin (BTC) usually view the largest cryptocurrency as a digital version of gold, a new report from the Global Bank Standard Chartered who argued that investors should see it like a tech stock with some extra benefits.
Led by Geoff Kendrick, the Stanchart team said the Bitcoin relationship with Nasdaq was “almost always” becoming stronger than gold, the old-school safe asset. While the BTC may have a role as a place to hide in instances of financial incomprehensibility such as the 2023 bank banking crisis in the region or what could be unstable US debt trajectory, the report said, the fact is that there is a need for such hedges, thus increasing its behavior like a traditional tech stock.
“Investors can view BTC as the same fence against traditional finances and as part of their tech allocation,” Kendrick said. But, at least “in the short term, the BTC may be better viewed as a tech stock than as a fence against Trade issues,” he added.
Playing with the idea of Bitcoin as part of a tech portfolio, the report suggested an index remodel of the so-called Wonderful 7 (Mag 7) Stock-the mega-cap tech names that pushed the overall return of the latter market, Apple, Alphabet, Microsoft, Nvidia, Amazon, Meta and Tesla (Tesla). This new “Mag 7B” will release Tesla for Bitcoin.
The result? The MAG7B has continued to make a higher return that is at risk than the original group over the last seven years, strengthening BTC’s role in a tech -focused portfolio, Kendrick says. The MAG7B released the MAG7 on average around 1% with a nearly 2% lower volatility on an annual basis, a major benefit to institutional investors and large asset allocators, he continued.
“The BTC should be seen as delivering many goals to the investor portfolios. This will open the possibility of more institutional purchase,” Kendrick said.
Asset managers are advancing for Bitcoin in investment portfolios for variable purposes. For example, Blackrock, the largest manager of owner in the world, Recommended Considering a up to 2% BTC allocation in traditional stock and bond portfolios. Meanwhile, asset managers such as 21shares and Bitwise have launched funds exchanged by the exchange (ETF) combining gold and bitcoin as auxiliary properties.
