Bitcoin is often compared to gold and promoted as a hedge against financial risks.
However, Standard Chartered analyst Geoffrey Kendrick argues that the world’s largest cryptocurrency behaves more like a large-cap tech stock than the yellow metal.
“Bitcoin trading is highly correlated to the Nasdaq over short time horizons,” Kendrick told clients in a recent note, challenging the widely held perception of BTC as ‘digital gold.’
His report comes amid mounting economic uncertainty fueled by Trump’s tariffs, which have added volatility to financial markets.
This uncertainty is making it difficult for Bitcoin to hold above the closely watched $100,000 level.
Bitcoin’s correlation with Nasdaq is a good thing
Bitcoin’s correlation with the tech-heavy index touched a high of 0.8 this year. While the number has since come down a little, it still sits at about 0.5 at the time of writing.
In comparison, the asset’s correlation with gold currently sits at 0.2 only, after touching zero last month, indicating it tends to move more like a large-cap tech stock and less like the king of metals.
But that isn’t necessarily a bad thing, argued Kendricks in his research note, adding “Having more than one use will bring fresh capital inflows to the assets.
After slipping to under $80,000 at one point, the price of BTC has recovered more than 10% over the past two weeks.
BTC has been trading much like Nvidia lately
In its latest research note, the investment firm proposed the idea of “Mag 7B” – a fusion of Bitcoin and the Magnificent 7 tech stocks.
Since December 2017, the hypothetical Mag 7B has performed better than the Magnificent 7. “Mag 7B’s relative returns are decent on both an absolute basis and a calendar-year basis,” Kendricks wrote.
Much like Nvidia, the world’s largest cryptocurrency by market cap has also traded in a volatility-adjusted fashion since the inauguration of President Donald Trump, he added.
Nvidia is currently down some 12% since January 20th while Bitcoin has lost about 16% over the same period.
How high could Bitcoin fly in 2025?
Despite recent pullback and continued uncertainty coming out of the White House, London-based banking giant Standard Chartered continues to recommend buying BTC on the weakness.
Geoffrey Kendrick expects the asset’s price to hit $200,000 by the end of this year, and soar further to touch the $0.5 million mark before the end of Trump’s tenure.
Part of the ongoing weakness in BTC may be due to the $1.5 billion Bybit hack in February. However, the firm’s analyst is convinced that the crypto industry will be significantly safer as it becomes more “institutionalized.”
Additionally, the pro-crypto policies and regulatory clarity under the Trump administration will continue to drive global interest in Bitcoin and will help drive the asset’s price up moving forward, he concluded.
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