Bitcoin is increasingly behaving like a software stock, with its latest correction taking place alongside the broader sale of software.
The relationship between Bitcoin and software stocks has strengthened significantly. On a rolling 30-day basis, bitcoin’s correlation with the iShares Expanded Tech Software ETF (IGV) stands at a high of 0.73, according to ByteTree. IGV is down about 20% year to date, while bitcoin is down 16%.
IGV is heavily weighted toward software and service names like Microsoft (MSFT), Oracle (ORCL), Salesforce (CRM), Intuit (INTU), and Adobe (ADBE).
While the tech sector looks relatively resilient overall — the Nasdaq 100 (QQQ) is only about 4% below its all-time high — software stocks have absorbed most of the selling pressure, and bitcoin is increasingly trading in line with this weaker pocket of the market rather than the broader index.
As for why software names are hammered, the answer is simple: AI. Rapid progress toward fully functional artificial general intelligence (AGI) is currently considered an existential problem for software.
“There is no doubt that Bitcoin was caught in the technological sell-off,” ByteTree said. “At its heart, Bitcoin is an Internet stock. Software stocks have been the most recent casualty, and the Bitcoin price has performed similarly over the past five years, with strong correlation.”
ByteTree also notes that the average tech bear market lasts about 14 months. With the current downturn having started in October, this suggests that pressure could persist for much of 2026. However, ByteTree notes that a resilient economic backdrop could support Bitcoin.
“Bitcoin is just open source software,” said Matthew Sigel of Van Eck.
