Bitcoin Miners' Diversification Shifts Correlation with Crypto Prices

Crypto stocks are being ranked by their correlation to Bitcoin and Ethereum, and some surprising results have emerged. Fundstrat co-founder Tom Lee measured the 90-day correlations of 17 large-cap crypto-linked stocks against BlackRock's two crypto funds.

The top performers in terms of correlation were MicroStrategy (MSTR) at 78% for tracking Bitcoin, and BitMine Immersion Technologies (BMNR) at 80% for tracking Ethereum. However, the results are not as clear-cut when it comes to Bitcoin miners.

Crypto miners such as Core Scientific (CORZ), Cipher Mining (CIFR), TeraWulf (WULF), and Hut 8 (HUT) showed relatively low correlations of between 16% and 19%. However, the reason for this is not because they are less closely tied to Bitcoin prices.

Instead, it appears that these miners have diversified their revenue streams by offering computing power to artificial intelligence companies. This has led to a significant shift in their business models, with AI-related revenue now accounting for a majority of their income.