Ecoinometrics - Tracking Bitcoin

September 27, 2021

There are many ways to get exposure to Bitcoin. 

Some of them are direct like buying spot BTC, futures, and ETFs. Some of them are indirect, like buying Bitcoin miners or MicroStrategy stocks.

So say you are looking for some indirect exposure to Bitcoin. Which stock should you buy?

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Tracking Bitcoin

If you want to track Bitcoin’s price then obviously the first thing to do is, well… buy Bitcoin.

That being said, there are many reasons why you might want to look for some indirect exposure.

Maybe you can’t get your hands on BTC for regulatory reasons. Like if you are a big investment institution, outright holding BTC might be a bit too much for compliance. But buying shares of say MicroStrategy should be more straightforward.

Or maybe you think that some stocks that give you exposure to Bitcoin actually have upsides that could outpace BTC itself.

So what are the options for some indirect exposure? 

If we stay in the realm of the stocks that are liquid enough, we can break it down in a few categories.

The Bitcoin miners: Marathon (MARA), Hut 8 (HUT), Riot (RIOT), Bitfarms (BITF).

The pseudo ETFs: MicroStrategy (MSTR) or a composite index like the Bitcoin Treasuries Index (INDEX).

The exchanges: Coinbase (COIN).

The stocks that are “involved” tangentially with Bitcoin: Square (SQ) and Tesla (TSLA).

This is not an exhaustive list, but those are liquid stocks that should be representative of their category.

So maybe one of the main questions we can have is: how well are these stocks correlated to BTC?

Because after all, we want some indirect exposure to Bitcoin’s performance, not just stocks whose name is associated with BTC.

Let’s look at the one-month correlation scores then.

Quick reminder, the correlation score measures the tendency of two assets to move in the same direction during a given period of time:

  • A score of 100% means they always move in the same direction.

  • A score of -100% means they always move in the opposite direction.

  • A score of 0% means they move independently.

Ok, so what do we have here. Something easy first. As far as investors are concerned, MicroStrategy’s main business over the past year has been to hodl BTC. Thus they should be a good gauge of what we expect to be highly correlated.

Check it out (INDEX refers to the Bitcoin Treasuries Index).

Starting in October last year you can see that MSTR correlation score moves above the 50% level. It has stayed there since then with an average of 63%. 

By comparison the NASDAQ as a whole pretty much remained below the 50% mark. 

So this gives a frame of reference for what highly correlated means.

With that in mind we can look at Square and Tesla. Those two don’t have Bitcoin at the core of their business. They may have some in their treasury or be vocal about it, but by and large investors don’t think of them as “Bitcoin stocks”.

See what we have.

Those two behave pretty close to the NASDAQ that is they don’t track Bitcoin’s move very well. Again that’s expected.

What about the miners then? Since their revenue is closely tied to the value of Bitcoin you’d think they must be correlated to Bitcoin pretty strongly. 

Let’s see.

Yep, they are typically in the 50% region and often above that level.

So as with MicroStrategy when you invest in the miners you track the BTC moves pretty well.

Finally for the exchanges we have much less data since Coinbase was only listed earlier this year. That being said we see a familiar picture.

So at the end of the day it doesn’t come as a big surprise but you get the best exposure to Bitcoin with MicroStrategy, the miners and the exchanges.

Actually if you look at the one year performance of the miners stocks, in retrospect they were the obvious pick.

See for yourself.

If you think about it, that totally makes sense. I bet a lot of institutional investors haven’t yet dipped their toes in trading spot BTC, mostly for compliance reasons.

It is a bit like the gold miners when back in the days it was complicated to get your hands on physical gold.

So the play for these guys has probably been, stay away from spot but trade the stocks. 

That has meant a lot of money getting in those relatively small cap stocks and performance followed.

In my opinion this is likely to continue until we get a Bitcoin ETF in the US. So it isn’t too late to get into these stocks if you are looking for another way to get exposure to Bitcoin.


Starting from today I’ll be running a weekly poll asking readers to make price predictions for the coming month.

The idea is to see:

  • How good those crowdsourced price predictions can be.

  • How the recent price action influences the answers to the poll.

  • Is there a difference in price prediction between different categories of holders.

  • For those answering questions related to Ethereum, when do we see signs that respondents believe in the decoupling.

The poll is anonymous, but to be able to establish those breakdown between different groups it would be great if you can answer the few additional questions regarding your holdings after giving your price prediction.

The first version of the poll is available at this link:


We’ll refine the list of questions over time but for now let’s keep it simple.

To get interesting results we need as many answers as possible. So please don’t hesitate to share the link and the upcoming post on Twitter.

The poll will be open for 24 hours starting from this email.

Thanks for participating. Looking forward to analyzing the results.

Link to the poll.

That’s it for today. If you have learned something please subscribe and share to help the newsletter grow.




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