Bitcoin as a Tech Stock: A New Perspective
Bitcoin (BTC) has traditionally been seen as a hedge against financial instability, but a recent analysis by Standard Chartered’s head of digital assets research, Geoffrey Kendrick, suggests that it may also be evolving into a tech stock in its own right.
Reimagining the Tech Stock Index
In a research report shared with CryptoSlate, Kendrick proposed the inclusion of Bitcoin in the famous “Magnificent 7” tech stock index to potentially enhance the index’s overall returns.
Short-term Tech Proxy, Long-term Hedge
Kendrick’s team conducted a study where they replaced Tesla with Bitcoin in the index, creating the “Mag 7B” index. The findings showed that the Mag 7B consistently outperformed the original index in terms of return-to-volatility from 2020 through 2024.
The report stated, “We find that our index, ‘Mag 7B’, has both higher returns and lower volatility than Mag 7. This suggests that investors can view BTC as both a hedge against traditional finance (TradFi) and as part of their tech allocation.”
Bitcoin’s Role in Global Portfolios
As Bitcoin gains prominence in global portfolios, Kendrick believes that the case for treating it as a mainstream risk asset will strengthen. The report highlighted the increasing institutional flows into Bitcoin, especially after the approval of spot Bitcoin ETFs in the US.
The report mentioned, “As BTC’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.”
Relationship with Traditional Finance and Nasdaq
While Bitcoin is seen as a medium-term hedge against traditional finance risks, Kendrick noted that over shorter time horizons, it trades similarly to the Nasdaq. This duality positions Bitcoin as both a hedge and a high-beta tech asset.
Kendrick anticipates a potential market rebound, especially with positive US tariff announcements and broader tech optimism. Bitcoin’s alignment with high-growth tech assets could lead to increased demand and price appreciation.
Looking Ahead
Despite short-term market fluctuations, Kendrick believes that Bitcoin needs a significant catalyst for a sustained rally to new highs. His analysis underscores the evolving nature of Bitcoin as a hybrid asset, blending characteristics of a hedge and a tech stock.
