Tesla, Elon Musk’s electric car company, has seen its share price fall by almost half since its December highs (as traders eye a Federal Reserve “big catalyst”).
Tesla, one of the so-called “Magnificent 7” tech stocks that includes Alphabet, Amazon, Apple, Meta, Microsoft and Nvidia, has ridden a U.S. president Donald Trump stock market “bump” but is struggling amid a sell-off that led Musk to issue a crypto price warning.
Now, as fears swirl a new, mystery threat is targeting crypto, Standard Chartered analysis has found replacing Tesla with bitcoin in the Magnificent 7 delivers higher returns and lower volatility—calling the index Mag7B.
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Tesla chief executive Elon Musk has seen the company’s share price collapse by almost half since it … More
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“We find that Mag7B has both higher returns and lower volatility than the Magnificent 7,” Geoffrey Kendrick, global head of digital assets research at Standard Chartered Bank, said in an emailed note.
“This suggests that investors can view bitcoin as both a hedge against traditional finance and as part of their tech allocation. Indeed, as bitcoin’s role in global investor portfolios becomes established, we think that having more than one use will bring fresh capital inflows to the asset. This is particularly true as bitcoin investment becomes more institutionalized.”
Bitcoin has seen huge Wall Street adoption in the last year as a fleet of spot bitcoin exchange-traded funds (ETFs) become some of the fastest growing funds of all time and companies follow Michael Saylor’s Strategy in buying bitcoin as a corporate reserve asset.
“If it were included, the implication would be more institutional buying as bitcoin would serve multiple purposes in investor portfolios,” Kendrick said, adding the Mag7B produced consistently higher risk-adjusted returns than the original group over the past seven years.
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The bitcoin price has rocketed higher over the last year but has fallen sharply along with Tesla and … More
Forbes Digital Assets
The bitcoin price has soared over the last year, boosted first by Wall Street and then by Donald Trump’s embrace of bitcoin and crypto on the campaign trail.
The bitcoin price surged to almost $110,000 per bitcoin following Trump’s election victory and has since declined along with Tesla and other sky-high tech stocks as traders de-risk in the face of Trump’s tariff threats.
“It’s true that replacing Tesla with bitcoin would improve the historic returns of the Mag 7 group,” John Haar, managing director at bitcoin-buying app Swan Bitcoin, said in emailed comments.
“However, the same can be said for including bitcoin in favor of any stock in the group. Over the past 10 years, the best performer of the Mag 7 has been Nvida, which has returned approximately 70% per year. Bitcoin has returned approximately 80% over the past 10 years.”