Bitcoin (BTC) Is Still Just Another Trade to Wall Street, Says Standard Chartered

According to Standard Chartered, Bitcoin is still just another trade to Wall Street. It's being grouped with tech stocks and traded like one.

Standard Chartered compares Bitcoin to tech stock in a new Mag 7B index

Standard Chartered still sees Bitcoin as another trade for Wall Street, grouping it with tech stocks for another quarter and comparing it with Nvidia and Tesla.

The cryptocurrency is being traded like a tech stock, getting picked up when it’s useful and tossed when it’s not. The bank said on Monday that Bitcoin’s correlation with the Nasdaq is now around 0.5, and earlier this year, it went up to 0.8.

At the same time, its link with gold has collapsed. Since January, that correlation dropped to zero at one point. Now it’s just above 0.2.

“Bitcoin trading is highly correlated to the Nasdaq over short time horizons,” said Geoff Kendrick, global head of digital assets research at Standard Chartered, in the report.

“This property suggests that BTC should be viewed as a basket of large-cap tech stocks.”

He added that if Bitcoin were included in a tech basket, the implication would be more institutional buying as BTC would serve multiple purposes in investor institutions’s.

This isn’t new. Wall Street keeps switching how it sees crypto. One month it’s a tech play. The next month it’s a “hedge against the traditional system.” But Kendrick didn’t deny that hedge idea.

“In reality, the need for such hedges is very infrequent. Hence, we prefer to view BTC as an asset class that is currently favoured by specific types of investors.”

Standard Chartered adds Bitcoin to tech stock experiment Mag 7B

Meanwhile, Standard Chartered has also made up a new index called the Mag 7B. That one takes the Magnificent 7 tech stocks — Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA) — but kicks Tesla out and adds Bitcoin in its place.

Since December 2017, Mag 7B outperformed the regular Mag 7 by about 5%. That happened in five out of seven calendar years, even though the lead in 2022 was tiny. On average, Mag 7B returned about 1% more per year than Mag 7, Kendrick said. The gains weren’t massive but were consistent.

Also, over a longer time period from January 20, when Donald Trump took office again, Bitcoin dropped about 16% and Nvidia fell 12%. Tesla crashed 36%, which is more like ether (ETH) at 38% lower in the same time.

“Investors can view Bitcoin both as a hedge against [traditional finance] and as part of their tech allocation,” Kendrick said.

He added that Bitcoin’s role in portfolios is becoming more "pivotal" and this dual purpose might attract more capital, especially now that it’s being adopted more by institutions.

Bitcoin volatility from Trump tariffs

Since Trump started pushing tariffs again, Bitcoin went down around 5% for the year. That’s not surprising, since Bitcoin tends to react to macroeconomic triggers, Standard Chartered said.

The bank noted two specific patterns: Bitcoin usually moves up when money supply (M2) grows, and down when the U.S. dollar index (DXY) rises. Those two relationships are still active.

Traders are now waiting for some relief in Q2, hoping that Bitcoin will bounce as the market gets more clarity on tariffs. But the White House has kept markets guessing.

U.S. stock futures saw minimal changes on Monday, March 24, after a day when major indexes had surges on hopes that Trump would scale back his plans.

The S&P 500 futures and Nasdaq 100 futures were both down 0.1%, while the Dow Jones futures dropped 43 points. That came after gains earlier that day, as reported by The Wall Street Journal. According to their report, the White House may reduce the scope of the upcoming tariffs, which are supposed to go live on April 2.

Those levies are part of Trump’s broader plans to boost domestic manufacturing and decrease the trade deficit. But the tariffs have sparked worries about a trade war with China, and they could hit consumers in the coming months.

The tariffs on goods from China are already at 250% for some product categories. But the administration is preparing to impose another round of tariffs, this time on all remaining imports from China. Those new tariffs could take the total tariffs to more than 500% for some products.

Standard Chartered also noted that, despite the recent volatility in crypto markets, institutions are becoming increasingly interested in investing in digital assets.

In a separate report, the bank’s analysts said that while they expect more volatility in crypto markets this year, they see a long-term opportunity for institutions to invest in the asset class.

“We see opportunities