Quick Take
- After creating a hypothetical “Mag7B” index last week that swapped Tesla for bitcoin, Standard Chartered now calls bitcoin the “strongman” because it has held up better than most tech stocks in the recent market selloff.
- Bitcoin’s resilience could take it back to $88,500 by this weekend, according to the bank, as it suggests to “HODL” the cryptocurrency.
Bitcoin could be heading back to $88,500 as early as this weekend from its current price of around $83,100, according to Standard Chartered.
As the broader traditional finance market selloff continues, driven by U.S. President Donald Trump’s tariffs, bitcoin has shown strength and can now be viewed as a “U.S. isolation” hedge, according to Geoffrey Kendrick, global head of digital assets research at Standard Chartered.
“I [previously] argued that bitcoin trades more like tech stocks than it does gold most of the time. At other times, and structurally, bitcoin is useful as a TradFi [traditional finance] hedge (e.g., March 2023 SVB [Silicon Valley Bank] collapse). Over the last 36 hours, I think we can also add ‘U.S. isolation’ hedge to the list of bitcoin uses,” Kendrick wrote in an email to The Block on Friday.
By calling bitcoin a “U.S. isolation” hedge, Kendrick is likely suggesting that the cryptocurrency could gain value in scenarios where the U.S. appears increasingly isolated from the global economy, such as recent moves to impose tariffs.
Last week, Kendrick argued that bitcoin trades more like a tech stock than gold. At the time, he also introduced a hypothetical Mag7 index called Mag7B, which swapped Tesla for bitcoin. He said this revised basket delivered higher returns and lower volatility than the original lineup of seven mega-cap tech stocks.
In today’s note, Kendrick said that over the last 36 hours, as TradFi markets bled and Mag7 stocks tumbled, bitcoin and ether showed relative strength.
“Strongest performers were MSFT [Microsoft] and BTC,” he said. “Same again so far today in BTC spot and tech futures.”
Thursday’s price action across the Mag7 index + bitcoin and ether
The above chart shows that while big tech stocks like Apple and Meta dropped nearly 9% on Thursday, bitcoin and Microsoft held up better than the rest.
“Bitcoin is proving itself to be the best of tech (upside when stocks go up) and a hedge in multiple scenarios,” Kendrick said. “A break back above the critical $85,000 level looks likely today, post payrolls. That opens up a move back to the $88,500 pre-tariff level from Wednesday (likely this weekend).”
Kendrick’s note comes amid growing investor anxiety over renewed tariff risks and fears of a U.S. recession. Amid the chaos, Kendrick’s closing recommendation is simple: “HODL.”
Source: theblock.co
