Bitcoin is increasingly behaving like a software stock, with its latest correction developing alongside the software sell-off.
The relationship between bitcoin and software stocks has strengthened noticeably. Over a rolling 30-day period, bitcoin’s correlation with the iShares Expanded Tech Software ETF (IGV) is at a high of 0.73, according to ByteTree. IGV is down around 20% so far this year, while bitcoin is down 16%.
IGV is heavily weighted toward software and services names like Microsoft (MSFT), Oracle (ORCL), Salesforce (CRM), Intuit (INTU), and Adobe (ADBE).
While the tech sector appears 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 segment of the market rather than the broader index.
As for why software names are criticized, the answer is simple: AI. Rapid progress towards fully functioning artificial general intelligence (AGI) is currently considered an existential issue for software.
“There can be no doubt that Bitcoin has been caught up in the technology sell-off,” ByteTree said. “At its core, bitcoin is an Internet stock. Software stocks have been the most recent victim, and the price of bitcoin has shown similar performance over the past five years, with a high correlation.”
ByteTree also notes that the average tech bear market lasts about 14 months. Given that the current recession began in October, this suggests that pressure could persist for much of 2026. However, ByteTree notes that a resilient economic backdrop could provide support for bitcoin.
“Bitcoin is just open source software,” said Van Eck’s Matthew Sigel.
