HomeTechBitcoin Should Replace Tesla as Investment in Mag 7 Returns

Bitcoin Should Replace Tesla as Investment in Mag 7 Returns

Published on

Article NLP Indicators
Sentiment 0.80
Objectivity 0.90
Sensitivity 0.01

Bitcoin’s correlation with the Nasdaq has been stronger than gold, suggesting a shift in how investors view this digital asset. A new ‘Mag 7B’ index proposal swaps out Tesla for bitcoin, promising higher risk-adjusted returns and lower volatility.

DOCUMENT GRAPH | Entities, Sentiment, Relationship and Importance
You can zoom and interact with the network

Bitcoin’s correlation with the Nasdaq has ‘almost always‘ been stronger than with gold, according to Standard Chartered Bank‘s analysis. This suggests that investors should view bitcoin more like a tech stock than digital gold.

DATACARD
Understanding Bitcoin: A Digital Currency Revolution

Bitcoin is a decentralized digital currency that allows for peer-to-peer transactions without the need for intermediaries.

Created in 2009 by an anonymous individual or group using the pseudonym Satoshi Nakamoto, Bitcoin uses cryptography to secure and verify transactions.

The total supply of Bitcoin is capped at 21 million, making it a scarce asset.

As of 2022, over 18 million Bitcoins have been mined, with new ones being created through a process called mining.

A New Perspective on Diversification

Asset managers have been advocating for including bitcoin in investment portfolios for diversification purposes. However, the traditional view of bitcoin as a safe-haven asset may be outdated. Instead, bitcoin can be seen as serving multiple purposes in investor portfolios, including both hedging against traditional finance and as part of their tech allocation.

Remodeling the Magnificent 7

Standard Chartered Bank‘s report proposes a remodel of the index of the so-called Magnificent 7 (Mag 7) stocks. This new ‘Mag 7B’ would swap out Tesla for bitcoin, resulting in higher risk-adjusted returns and lower volatility over the past seven years.

Key Benefits to Institutional Investors

mag7,diversification,bitcoin,returns,investment,tesla

The Mag7B produced consistently higher risk-adjusted returns than the original group, with nearly 2% lower volatility on an annual basis. This presents a key benefit to institutional investors and large asset allocators.

Opening Up New Opportunities for Institutional Buying

By including bitcoin in investment portfolios, investors can open up new opportunities for even more institutional buying. As Standard Chartered Bank‘s analysis suggests, bitcoin is no longer just seen as a safe-haven asset but as a valuable component of a tech-focused portfolio.

A Shift in Investor Perspective

The traditional view of bitcoin as a digital version of gold may be giving way to a more nuanced understanding of its role in investment portfolios. As the correlation between bitcoin and the Nasdaq continues to strengthen, it’s clear that investors will need to adapt their strategies to include this growing asset class.

A New Era for Tech Portfolios

The inclusion of bitcoin in tech portfolios presents a significant opportunity for institutional investors and large asset allocators. By recognizing bitcoin’s value as both a hedge against traditional finance and as part of their tech allocation, investors can tap into the growth potential of this emerging market.

SOURCES
The above article was written based on the content from the following sources.

IMPORTANT DISCLAIMER

The content on this website is generated using artificial intelligence (AI) models and is provided for experimental purposes only.

While we strive for accuracy, the AI-generated articles may contain errors, inaccuracies, or outdated information.We encourage users to independently verify any information before making decisions based on the content.

The website and its creators assume no responsibility for any actions taken based on the information provided.
Use the content at your own discretion.

AI Writer
AI Writer
AI-Writer is a set of various cutting-edge multimodal AI agents. It specializes in Article Creation and Information Processing. Transforming complex topics into clear, accessible information. Whether tech, business, or lifestyle, AI-Writer consistently delivers insightful, data-driven content.

TOP TAGS

Latest articles

Animals Starting with M, from Majestic to Mischievous Creatures

Get ready to meet the majestic, the mischievous, and everything in between! Discover 12...

Beyond the Counter: Uncovering the Hidden Gems of Supermarket Cafes

As supermarket chains like Morrisons close their cafes, a question lingers: what will replace...

Richard Chamberlain, Legendary Actor of ‘Shogun’ Fame, Passes Away at 90

Beloved actor Richard Chamberlain, famous for his roles in 'Shogun' and 'The Thorn Birds',...

Migrants Turned Away from U.S., Head Home Through Panama

As the US tightens its immigration grip, Latin American migrants are turning back home...

More like this