Bitcoin could be the Mag 7’s next big upgrade—At Tesla’s expense

Tesla has long been a cornerstone of the Magnificent 7 (Mag 7)—a group of elite tech stocks that have defined market growth over the past decade. 

On Monday, the EV stock was the biggest gainer of the “so-called” Magnificent Seven stock group, leaping nearly 12% as investors grew optimistic that President Trump’s tariff plans may not be as comprehensive as thought. Trump’s announcement that he would pause tariffs on the auto sector due April 2 alleviated fears about the financial impact for Tesla.

However, the EV giant has faced increasing challenges, from declining demand and rising competition to CEO Elon Musk’s unpredictable leadership decisions. While Tesla was once the poster child for innovation and high-growth potential, some analysts now argue that its place in the Mag 7 is no longer as secure as it once was.

Standard Chartered lit the fuse, suggesting that Bitcoin should replace Tesla in the elite index. The bank insisted that BTC has produced higher returns with less volatility over the past seven years. 

Bitcoin has become even more in lockstep with the performance of high-growth tech stocks like Nvidia, leading analysts to reevaluate the asset’s classification. With the rapid pace at which institutional investors are incorporating Bitcoin into their portfolios, could the Mag 7 be long overdue for an upgrade?

Tesla’s replacement with Bitcoin could boost the Magnificent 7’s performance

With its innovative approach to electric vehicles and energy solutions, Tesla has been one of the truly transformational forces in the Magnificent Seven—Apple, Microsoft, Nvidia, Amazon, Alphabet, and Meta. 

However, its stock has become more volatile, and the company has had issues with supply chain snags and CEO Elon Musk’s controversial leadership. 

On the other hand, Bitcoin emerged as a high-performing asset and has proven its capability of delivering better risk-adjusted returns over the same period.

According to Standard Chartered’s analysis, a seven-year analysis of adjusted returns shows that the hypothetical Mag 7B outperforms the Mag 7 by 1% on average and even has close to 2% lower annual volatility.

He added that Mag 7B has surpassed the Mag 7 stocks by about 5% since December 2017, a time when BTC’s all-time high was even below $20,000.

Bitcoin’s market behavior aligns more with tech stocks than safe-haven assets

Geoffrey Kendrick, Standard Chartered’s global head of digital assets research, says that Bitcoin functions less like a traditional hedge against financial instability than a technology stock. 

Unlike gold, which has remained largely uncorrelated to the stock market, Bitcoin’s price movements have frequently mirrored those of the Nasdaq. Kendrick found the correlation so strong that he concluded investors need to think of Bitcoin as part of their tech allocation rather than as an alternative safe-haven asset.

Since Bitcoin ETFs were approved in early 2024, the asset has become more accessible, as its trading costs are now lower than that of many Mag 7 stocks. Giving Bitcoin and other similar assets some level of intrinsic value, this additional access could help solidify Bitcoin’s standing in institutional portfolios as an asset with continued upside and adoption.

One of the major takeaways of Standard Chartered’s analysis is how Bitcoin volatility dynamics are shifting. Once upon a time, Bitcoin was seen as an exceptionally volatile asset, and thus, in many ways, it is starting to show similar volatility to high-growth tech stock Nvidia. At the same time, Tesla has been displaying trading behavior more like Ethereum, which has been more volatile than Bitcoin over time.

This influx in volatility means that Bitcoin is maturing faster than a lot of people thought possible. If Bitcoin tends toward the volatility of established tech stocks, it reinforces the case for holding it in tech-oriented portfolios.

Bitcoin gains traction as the next member of the Magnificent 7

The idea of including Bitcoin in a major index like the Mag 7 is gaining traction, particularly as asset managers warm up to the asset. BlackRock (the world’s largest asset manager) has already suggested investors put 2% of their portfolios into Bitcoin. 21Shares and Bitwise have launched ETFs that include Bitcoin as a traditional asset alongside gold, showing its increasing legitimacy.

As institutional adoption grows and as more investors see Bitcoin not only as a hedge but also as a high-growth asset, the Standard Chartered proposal may not be a mere thought experiment; it might be a glimpse of the future. 

With markets evolving and the digital asset moving further into the gladiatorial area of mainstream finance, perhaps in time, the notion that Bitcoin will be found in cohorts similar to tech giants Microsoft and Nvidia will not be the exception but the norm.

Tesla’s position in the Magnificent 7 is less certain than it once was, and Bitcoin’s ascendance as a legitimate institutional asset is unquestionable. Standard Chartered’s idea to restructure the Mag 7 is unconventional, but it is based on sound data and market trends. If institutional investors agree to stay open to the idea, we may witness an occasion where Bitcoin becomes a bona fide element of modern tech-heavy portfolios well before originally envisioned.

Could Bitcoin’s slot in the Mag 7 be preordained as markets change? If Standard Chartered’s analysis stands, the real question isn’t whether but when.