According to Standard Chartered, Bitcoin has a stronger correlation with the Nasdaq than with gold most of the time, suggesting that investors might benefit from treating it like a major tech stock. Currently, Bitcoin’s correlation with the Nasdaq stands at approximately 0.5, after peaking around 0.8 earlier this year. In contrast, its correlation with gold has been declining since January, reaching zero at one point and now resting just above 0.2. “Bitcoin trading is closely tied to the Nasdaq over shorter time periods,” stated Geoff Kendrick, global head of digital assets research at Standard Chartered, in a note released on Monday. “This connection to the Nasdaq suggests that Bitcoin could potentially be included in a collection of large tech stocks; if this happens, it could lead to increased institutional buying as Bitcoin would fulfill multiple roles in investor portfolios.” Traditionally recognized as “digital gold” and a safeguard against challenges within the conventional financial system, Kendrick acknowledges the cryptocurrency’s role as a hedge but notes that “in reality, the necessity for such hedges is quite rare.” Standard Chartered introduced a theoretical index named “Mag 7B,” which incorporates Bitcoin alongside the Magnificent 7 tech stocks—Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla—while excluding Tesla from this mix. “Since December 2017, Mag 7B has outperformed Mag 7 by roughly 5%,” Kendrick observed. “On an annual basis, Mag 7B outshone Mag 7 in five out of seven years, albeit with a minor margin in 2022. The relative returns of Mag 7B are respectable both on an absolute level (averaging about 1% annual growth over Mag 7) and on a yearly basis.” Furthermore, Kendrick highlighted that Bitcoin has been exhibiting volatility-adjusted trading patterns akin to Nvidia since President Trump’s inauguration. Both assets have experienced declines of 16% and 12%, respectively, since January 20. In comparison, Tesla, which has decreased by 36% during the same timeframe, has shown trading behavior similar to that of ether (down 38% since January 20). “Investors may view Bitcoin as not only a hedge against traditional finance but also as part of their technology investment strategy,” Kendrick remarked. “As Bitcoin’s integration into global investor portfolios solidifies, we expect that its multifaceted utility will attract new capital inflows. This is increasingly important as Bitcoin investments become more institutionalized.” After facing a 5% decline this year due to President Trump’s recent tariff threats creating new market volatility, investors are optimistic about potential recovery in the second quarter, especially considering Bitcoin’s two key correlations: its positive relationship with money supply growth (M2) and its negative correlation with the U.S. dollar index (DXY). —Reporting contributed by CNBC’s Michael Bloom.
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