As institutional interest in Bitcoin (BTC) continues to grow, analysts suggest that replacing Tesla (TSLA) with Bitcoin in the ‘Magnificent 7’ portfolio could lead to better returns. Standard Chartered analysts argue that Bitcoin’s strong risk-adjusted performance, growing adoption, and supply dynamics make it an increasingly attractive asset compared to Tesla, whose stock has faced recent volatility.
Bitcoin vs. Tesla: A Shift in the ‘Magnificent 7’
The Magnificent 7 stocks—Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Meta (META), Nvidia (NVDA), and Tesla (TSLA)—have been the top-performing tech giants driving the stock market in recent years. However, Tesla has underperformed compared to its peers, raising questions about whether it still belongs in the elite group.
? Key performance highlights:
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Tesla’s stock has struggled in 2024, with declining growth projections and increased competition in the EV market.
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Bitcoin, on the other hand, has surged over 50% in 2025, benefiting from institutional adoption and growing demand for spot ETFs.
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Analysts suggest that replacing Tesla with BTC in the Magnificent 7 would improve overall portfolio returns while offering diversification benefits.
Why Bitcoin Is Gaining Institutional Attention
Analysts point to several key factors that make Bitcoin an attractive alternative to Tesla in high-growth portfolios:
? Superior Risk-Adjusted Returns
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Bitcoin’s Sharpe ratio, a measure of risk-adjusted performance, has historically outperformed Tesla’s.
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Despite Bitcoin’s volatility, its upside potential remains higher, driven by adoption and scarcity.
? Institutional Accumulation via Spot ETFs
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Since the approval of spot Bitcoin ETFs, institutions have been accumulating BTC at record levels.
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Bitcoin’s fixed supply of 21 million coins contrasts Tesla’s stock, which remains subject to dilution from share issuances.
⚡ Hedge Against Inflation and Market Risks
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Bitcoin is increasingly seen as digital gold, offering a hedge against inflation.
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Tesla’s stock price is tied to consumer demand, interest rates, and EV market competition, making it more vulnerable to macroeconomic conditions.
Could Bitcoin Be Added to Traditional Stock Portfolios?
The idea of including Bitcoin in major institutional portfolios is gaining traction. Some investment firms are now considering BTC as part of diversified equity allocations, rather than just a speculative asset.
? Potential impact on portfolio performance:
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If BTC replaced Tesla, backtested models suggest that the portfolio’s annualized returns could increase.
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Bitcoin’s low correlation with traditional equities could help reduce overall risk in diversified portfolios.
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With regulatory clarity improving, more fund managers may allocate to Bitcoin in the coming years.
However, Bitcoin’s volatility remains a concern, and some institutional investors still view it as a high-risk asset rather than a core portfolio component.
What’s Next?
As Bitcoin adoption continues to grow, its potential inclusion in mainstream equity portfolios may become a reality. While Tesla remains a key player in the EV and AI-driven sectors, Bitcoin’s scarcity, institutional adoption, and performance metrics make it an increasingly attractive alternative for investors seeking high-growth assets with unique market dynamics.
With more institutions exploring Bitcoin allocations, the question remains: Will BTC eventually be recognized as part of the next ‘Magnificent 7’ for the digital age? ?
