Standard Chartered replaces Tesla with Bitcoin in the 'Magnificent 7': A critical shift towards digital stability

Standard Chartered replaces Tesla with Bitcoin in the 'Magnificent 7': A critical shift towards digital stability

Bitcoin Replaces Tesla in Magnificent 7 Index: A New Era for Digital Assets

The unofficial Magnificent 7 Index, or “Mag 7” for short, traditionally includes seven leading companies in the technology industry: Alphabet (Google), Amazon, Apple, Meta (Facebook), Microsoft, NVIDIA and Tesla. However, according to recent news, British bank Standard Chartered has modified the index by replacing Tesla with Bitcoin due to its chronic underperformance. This decision aims to stabilize and adjust the performance of the index.

Superior performance and stability of Bitcoin

Standard Chartered has found in their research that Bitcoin has a better risk-reward ratio than Tesla, making it a valuable addition to technology portfolios. Geoffrey Kendrick of Standard Chartered Bank explains that Bitcoin is more highly correlated with the Nasdaq than traditional safe-haven assets like gold. Investors who want to combine growth with stability are increasingly turning to Bitcoin, whose market capitalization now exceeds $1.7 trillion. For comparison: Tesla's market value is lower.

The converted Mag 7B index has performed 5% better than its predecessor since its launch in December 2017. Over the past seven years, Mag 7B has delivered above-average annual returns with volatility of less than 2%. In contrast, Tesla's performance remains unpredictable. Fluctuations in earnings and changing market opinions weigh on the company's results, while the Magellan fund shows stable operational performance. These trends show that Bitcoin has resilience beyond that of ordinary stocks, making it an important asset class for institutional investors.

Institutional acceptance and its impact on the market

Institutional investors are increasingly adding Bitcoin to their portfolios, improving the digital asset's market liquidity. Thanks to Bitcoin spot ETFs, investors now have just as easy access to Bitcoin as they do to major technology stocks. Reservations about crypto assets are being reconsidered by many institutional investors, and Bitcoin is increasingly being evaluated as an investment strategy that offers both market value growth and risk hedging.

The growing interest in Bitcoin among global financial institutions is causing the digital currency to gain importance in financial systems. The Nasdaq's performance problems have encouraged many investors to explore alternative investments, with Bitcoin presenting itself as a promising digital currency. Predictions from financial experts suggest that Bitcoin could potentially reach $90,000 due to its increasing influence on institutional money management.

Standard Chartered's statement on cryptocurrency acceptance led to a 3.5% increase in Bitcoin, bringing the total cryptocurrency market cap to $2.9 trillion. Other digital assets such as Ethereum (+4%), XRP (+3.2%) and Solana (+6.5%) also recorded gains, while Dogecoin gained 3%. These strong market signals underscore that Bitcoin is increasingly trusted in the financial world.

Conclusion

Standard Chartered's strategic realignment of the Magnificent 7 Index shows that Bitcoin continues to gain relevance and acceptance in institutional investment strategies as a major digital asset. These developments are expected to increase Bitcoin's influence on the traditional financial market in the future and drive the integration of digital assets into mainstream portfolios.