Important: This information is for guidance purposes and may become out of date at any given time. It is not investment advice. Investments can rise and fall in value. We won’t make any assessment of whether the investments you choose are appropriate or suitable for you. If you are unsure of the suitability of any investment, investment service or strategy, you should seek independent financial advice. Past performance is not a reliable indicator of future results. Capital is at risk. Tax treatment will depend on your individual circumstances and could potentially change in the future.
Why consider bitcoin proxies?
Bitcoin’s growing popularity has attracted investors looking to diversify their portfolios, but the learning curve, technical details and regulatory uncertainties can be intimidating.
Bitcoin proxies could potentially help ease these concerns. They allow you to invest through familiar channels - just as you would with any other stock - thus offering a blend of convenience, transparency, and regulated market oversight. This can be particularly appealing to those who want to allocate a small portion of their capital to the bitcoin ecosystem without taking on the full burden of direct crypto ownership.
For UK investors, many of these proxies are accessible through various accounts offered by CMC Invest, including tax-advantaged Stocks & Shares ISAs. This means UK retail investors can gain bitcoin-related exposure while taking advantage of their annual ISA allowance, all under a well-regulated, investor-friendly framework.
In contrast, direct bitcoin exchange-traded funds (ETFs), such as the iShares Bitcoin Trust [IBIT], currently remain off-limits to UK retail investors due to Financial Conduct Authority (FCA) restrictions.
Leading bitcoin proxy: MicroStrategy [MSTR]
One of the best-known examples of a bitcoin proxy is MicroStrategy, a business intelligence firm that pivoted towards bitcoin as a strategic asset in 2020. Under the leadership of CEO Michael Saylor, the company began accumulating Bitcoin as a hedge against inflation and a way to enhance shareholder value. By December 2024, it had amassed roughly 439,002 bitcoins, more than 2% of the total bitcoin supply, correlating its share price closely with bitcoin’s performance. While this ambitious strategy amplifies potential returns, it also introduces significant risk, as MicroStrategy’s balance sheet is now heavily exposed to bitcoin’s price volatility.
Bitcoin miners as proxies: CleanSpark [CLSK], Riot Platforms [RIOT], and Marathon Holdings [MARA]
Bitcoin mining companies also serve as proxies. They generate revenue from validating bitcoin transactions, earning new coins as a reward. As bitcoin prices rise, so can their profitability - and their share prices often move in sympathy with the crypto market.
CleanSpark [CLSK] mined 668 bitcoins in December 2024, bringing its total for the entire year to 7,024 bitcoins. Although recent months have seen slight dips in monthly production, the firm remains committed to increasing its operational efficiency and hash rate (a measure of computing power).
Riot Platforms [RIOT] produced 516 bitcoins in December 2024, up from 495 in November . Holding 17,722 bitcoins at the end of 2024, Riot’s treasury represents a significant bet on Bitcoin’s long-term potential.
Marathon Holdings [MARA] recorded a standout December, mining 890 bitcoins thanks to expanded operations and improved efficiency. Its balance sheet boasts 44,893 bitcoins , underscoring its substantial exposure to the crypto space.
Diversifying into AI and HPC: Iren [IREN], Core Scientific [CORZ], and beyond
With revenue pressures rising, some bitcoin mining companies are branching into high-performance computing (HPC) and AI services. By leveraging powerful GPUs, these miners can diversify their income sources and reduce reliance on bitcoin’s price.
Iren [IREN] has invested heavily in Nvidia’s [NVDA] cutting-edge GPUs to provide AI cloud services. These upgrades have begun to contribute noticeably to its earnings, helping to offset any bitcoin mining downturns.
Core Scientific [CORZ] has similarly expanded into HPC. Emerging from a near-bankruptcy situation, it’s now constructing a 100MW data centre to support AI-focused clients. CEO Adam Sullivan expects exponential growth from AI data centre services.
Cipher Mining [CIFR] is another company operating at the intersection of crypto and HPC , joining several peers exploring ways to leverage their computational power beyond just bitcoin mining. Among these are Bit Digital [BTBT], Bitfarms [BITF], and TeraWulf [WULF], all of which have indicated their interest in tapping into the burgeoning AI and HPC markets.
Fund-based exposure: The growing popularity of bitcoin ETFs
While investing in individual companies provides one avenue of indirect Bitcoin exposure, some investors prefer the simplicity of ETFs. In January, the US Securities and Exchange Commission (SEC) approved a wave of spot bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust (IBIT), helping drive these funds into the spotlight. These ETFs track bitcoin’s price directly, offering a straightforward investment option without requiring investors to hold the cryptocurrency themselves.
However, UK investors currently don’t have access to these spot Bitcoin ETFs. The FCA has restricted retail investors from investing in this type of product, limiting their availability to US markets. As a result, UK investors seeking indirect bitcoin exposure must stick to bitcoin proxies - publicly traded companies and miners - or look to other financial instruments that align with the FCA’s guidelines.
Accessing bitcoin proxies in the UK
The aforementioned bitcoin proxies are available through any CMC Invest account type, including the Stocks & Shares ISA. Here, UK investors can allocate a small portion of their capital to these equities with the confidence that comes from dealing with a regulated investment platform. With CMC Invest, investors also benefit from our commission-free investing, and our competitive FX fees, making it even more cost-effective to gain indirect exposure to the crypto world.
Key considerations and research tips
While bitcoin proxies can offer convenience and regulatory familiarity, they are not without risks. Company balance sheets concentrated in bitcoin, volatile mining costs, and evolving regulatory landscapes all factor into the risk-reward equation. Before investing, consider the following:
Company fundamentals: Review financial statements, revenue sources, and diversification strategies. Firms heavily reliant on Bitcoin need scrutiny.
Operational efficiency: For miners, consider their hash rate, production costs, and ability to adapt to increasing network difficulty or changing energy costs.
Regulatory environment: Stay informed about any new rules that might affect your ability to hold these stocks in tax-advantaged accounts like ISAs.
Long-term outlook: Consider how involved the company is in emerging sectors like AI and HPC, which might provide alternative growth avenues if Bitcoin’s price stagnates.
By understanding the intricacies of each proxy, you can make more informed decisions that fit your risk tolerance and long-term investment goals. With the right approach, bitcoin proxies can serve as a stepping stone into digital assets, offering exposure, convenience, and familiarity for cautious yet curious investors.
Sources:
https://investors.cleanspark.com/news/news-details/2025/CleanSpark-Releases-December-2024-Bitcoin-Mining-Update/default.aspx
https://www.riotplatforms.com/riot-announces-december-2024-production-and-operations-updates/
https://ir.mara.com/news-events/press-releases/detail/1385/mara-announces-bitcoin-production-and-mining-operation-updates-fordecember-2024
https://irisenergy.gcs-web.com/static-files/0ba49b68-c6d0-4023-829f-40a8ea02d1a9
https://investors.corescientific.com/news-events/press-releases/detail/99/core-scientific-and-port-muskogee-break-ground-on-100-mw-hpc-data-center
https://investors.ciphermining.com/news-releases/news-release-details/cipher-mining-announces-december-2024-operational-update