Miners Ditch Bitcoin Correlation as AI Revenue Surges
Tom Lee recently ranked 17 large-cap crypto stocks based on their correlation to Bitcoin and Ethereum. The results show that some companies have shifted their focus from mining to providing computing power for artificial intelligence (AI) firms.
The top-ranked company in the Ethereum category is BitMine Immersion Technologies (BMNR), with a correlation of 80%. In contrast, several Bitcoin miners such as Core Scientific (CORZ), Cipher Mining (CIFR), TeraWulf (WULF), and Hut 8 (HUT) have relatively low correlations to Bitcoin, ranging from 16% to 19%
This shift towards AI-driven revenue is a significant change for the mining sector. According to Patrick Fleury, chief financial officer of TeraWulf, the company expects its business to be increasingly driven by recurring contracted revenue, reducing exposure to volatility associated with bitcoin mining.
The article also notes that treasury companies such as MicroStrategy (MSTR) track Bitcoin prices more tightly and have not seen significant benefits from this correlation. The 90-day trailing figures used in Lee's table may tighten or loosen with each market phase, and the next earnings season will test how far the split runs.