Research Summary
The report analyzes the performance of the “Magnificent Seven” stocks (Apple, Microsoft, Alphabet, Meta Platforms, Amazon.com, Nvidia, and Tesla) against Bitcoin and Ethereum from May 2019 to June 2024. It highlights the market cap growth of these entities and compares their performance.
Key Takeaways
Performance of the Magnificent Seven
- Outsized Market Performance: The Magnificent Seven stocks, which make up 30% of the S&P 500, have outperformed the wider market. The Roundhill Magnificent Seven ETF returned 35.8% year-to-date compared to the S&P 500’s 15.1%.
- Market Cap Growth: Over five years, these companies’ market cap increased by 262.5% from $4.35 trillion to $15.770 trillion. Nvidia and Tesla saw the most significant growth, with increases of 2,782.8% and 1,340.8%, respectively.
Comparison with Bitcoin and Ethereum
- Bitcoin and Ethereum Outperformance: Despite having significantly lower market caps in 2019, Bitcoin and Ethereum managed to outperform most of the Magnificent Seven stocks. Bitcoin’s market cap grew by 1,102.2%, while Ethereum’s increased by 2,218.3%.
- Nvidia’s Exceptional Performance: Nvidia was the only Magnificent Seven stock that outperformed both Bitcoin and Ethereum over the five-year period, with a market cap growth of 2,782.8%.
Market Cap Divergence between Bitcoin and Ethereum
- Market Cap Growth: From January 11, 2024, when the SEC approved 11 Bitcoin ETFs, Bitcoin’s market cap grew by 50% to $1,250.00 billion. In the same period, Ethereum’s market cap also grew by 50% to $421.00 billion.
- Alignment with Magnificent Seven: Ethereum’s market cap performance aligns with Nvidia’s, while Bitcoin’s aligns with Tesla’s.
Actionable Insights
- Monitor the Performance of Nvidia: Given its exceptional performance over the past five years, it would be beneficial to keep a close eye on Nvidia’s market trends and strategies.
- Consider the Impact of Regulatory Changes: The SEC’s approval of Bitcoin and Ethereum ETFs has significantly impacted these cryptocurrencies’ market cap growth. Future regulatory changes could similarly affect their performance.
- Assess the Potential of Ethereum: Despite having a smaller market than Bitcoin, Ethereum has shown impressive growth. Its upcoming lineup of ETFs could further boost its market cap.
