Bitcoin is increasingly behaving like a software stock, and its recent correction is unfolding alongside the broader software selloff.
The relationship between bitcoin and software stocks has strengthened significantly. On a 30-day rolling basis, bitcoin’s correlation with the iShares Expanded Tech Software ETF, (IGV) stands at a high 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 services names such as Microsoft (MSFT), Oracle (ORCL), Salesforce (CRM), Intuit (INTU) and Adobe (ADBE).
While the technology sector appears relatively resilient at the headline level — 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 get hammered, the answer is simple: AI. The rapid progress towards fully functioning artificial general intelligence (AGI) is currently considered an existential problem for software.
“There can be no doubt that bitcoin has been caught up in the technology selloff,” ByteTree said. “At its heart, bitcoin is an Internet stock. Software stocks have been the latest losers, and the price of bitcoin has shown similar performance over the past five years with high correlation.”
ByteTree also notes that the average technology bearer market lasts about 14 months. With this current downturn starting in October, it suggests the pressure could continue through most of 2026. However, ByteTree notes that a robust economic backdrop could provide support for bitcoin.
“Bitcoin is just open source software,” said Van Eck’s Matthew Sigel.
