25-3-2025 – Standard Chartered’s latest analysis reveals Bitcoin’s curious dance with traditional markets, suggesting the cryptocurrency behaves more like a tech stock than a conventional hedge. The digital asset’s correlation with the Nasdaq has reached 0.5, having peaked at 0.8 earlier this year, whilst its historical relationship with gold has virtually disappeared, dropping to a mere 0.2.
In a novel approach, the bank has crafted the ‘Mag 7B’ index, a modified version of the vaunted Magnificent Seven tech stocks. This innovative measure replaces Tesla with Bitcoin, yielding modest yet consistent outperformance since 2017. The reformed index has demonstrated a marginal advantage of roughly 1% annually over its traditional counterpart.
The cryptocurrency’s performance amidst recent political turbulence offers intriguing insights. Since Donald Trump’s renewed focus on trade tariffs, Bitcoin has witnessed a 16% decline, closely mirroring Nvidia’s 12% drop. This pattern stands in stark contrast to Tesla’s more dramatic 36% plummet, which more closely aligns with Ether’s 38% descent.
Market sentiment remains cautiously optimistic, with traders anticipating potential relief in the second quarter. However, Morgan Stanley’s Mike Wilson has struck a notably cautious tone, characterising the current market rebound as potentially short-lived. Despite the S&P 500’s impressive 1.8% gain to 5,767.57, Wilson suggests this rally might falter come earnings season.
The cryptocurrency’s responsiveness to macroeconomic factors remains evident, particularly in its sensitivity to money supply fluctuations and the US dollar index movements. At the time of reporting, Bitcoin commands a value of $87,722, reflecting its evolving role in institutional portfolios.
Geoff Kendrick, Standard Chartered’s global head of digital assets research, posits that Bitcoin’s dual nature – serving both as a hedge against traditional finance and a tech investment – could attract increased institutional interest. This perspective suggests a maturing market understanding of cryptocurrency’s place in modern investment strategies.
