While Bitcoin supporters (BTC) generally consider the largest cryptocurrency as a digital version of gold, a new Global Bank Chartered report, investors, investors should see it more as a technological action with certain additional advantages.
Directed by Geoff Kendrick, the Stanchart team said that Bitcoin’s correlation with the Nasdaq had “almost always” been stronger than with gold, the active of the old school. Although the BTC can have a place of place to hide in cases of financial instability such as the regional banking crisis of 2023 or what could be the trajectory of unbearable American debt, according to the report, the reality is that there is rarely a need for such hedges, therefore its growing behavior as more stock of traditional technology.
“Investors can consider BTC as coverage against traditional finance and as part of their technological allowance,” said Kendrick. But, at least “in the short term, the BTC can be better considered as a technological action than as a coverage against tradfi emissions”, he added.
Playing with the idea of Bitcoin in the context of a technological portfolio, the report proposed a reshaping of the so -called magnificent stocks 7 (MAG 7) – The technical names Mega Cap which led the overall market yields recently, Apple, Alphabet, Microsoft, Nvidia, Amazon, Meta and Tesla (TSLA). This new “Mag 7b” would exchange Tesla for Bitcoin.
The result? The MAG7B has produced adjusted risk -adjusted yields than the original group in the past seven years, strengthening the role of BTC in a technology portfolio, Kendrick said. The MAG7B has surpassed the MAG7 on average by around 1% with almost 2% of the lower annual volatility, a key advantage for institutional investors and significant asset beneficiaries, he continued.
“BTC should be considered to serve several objectives in investor portfolios. This would open up the possibility of even more institutional purchase,” noted Kendrick.
Asset managers have argued to include Bitcoin in investment portfolios for diversification purposes. For example, BlackRock, the largest asset manager in the world, recommended that you consider an allowance up to 2% BTC in traditional action and bond portfolios. Meanwhile, asset managers like 21Shares and Bitwise have launched negotiated funds on the stock market (ETF) combining gold and bitcoin as additional assets.
