Bitcoin: From Safe Haven to Tech Stock?
Bitcoin (BTC) is increasingly being seen as more than just a safe haven against financial turbulence; it may now be evolving into a legitimate tech stock, according to Geoffrey Kendrick, the head of digital assets research at Standard Chartered.
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In a detailed analysis released on March 24, Kendrick suggested a shift in the perception of Bitcoin by proposing its inclusion in the “Magnificent 7” tech stock index, traditionally comprised of major technology companies like Apple and Microsoft. This reconfiguration, he argues, could potentially boost the index’s returns.
To explore this hypothesis, Kendrick’s team substituted Tesla, the smallest member of the original “Magnificent 7,” with Bitcoin, creating what they called the “Mag 7B” index. The new index showed consistently higher returns with lower volatility from 2020 through 2024 compared to the traditional group, according to the research. Kendrick’s findings suggested that Bitcoin could serve as both a hedge against traditional financial systems and a part of a diversified tech portfolio, offering a dual role in investment strategies.
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As Bitcoin becomes more entrenched in institutional portfolios, Kendrick believes that its increasing institutional acceptance—especially after the approval of Bitcoin ETFs in the U.S.—will make it a more mainstream asset. He emphasized that Bitcoin’s evolving role in global investments strengthens the case for it being viewed as a significant risk asset, with more fresh capital likely to flow into it.
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While Kendrick still sees Bitcoin as a hedge against the risks of traditional finance in the medium term—citing the 2023 collapse of Silicon Valley Bank as a key example—he acknowledged that in the short term, Bitcoin’s price movements are closely linked to the performance of high-growth tech stocks, especially those in the Nasdaq. This correlation could lead to Bitcoin benefiting disproportionately if tech stocks, including the Nasdaq, experience a rebound.
Kendrick anticipates that news about US tariffs could spur positive market movements, potentially lifting both the Nasdaq and Bitcoin. As the Nasdaq has recently faced a tough quarter, a recovery could be a catalyst for Bitcoin to see upward momentum, with targets like $90,000 now in focus. However, Kendrick pointed out that for a more sustained rally, Bitcoin still requires a more substantial catalyst.
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This analysis highlights Bitcoin’s growing dual nature as both a hedge and a tech asset. As its role continues to solidify within institutional portfolios, Kendrick suggests that Bitcoin could become a permanent fixture in global investment strategies, appealing to investors seeking both growth and stability.
Alexander Stefanov
