Bitcoin Joins the Software Stock Party: A Match Made in Market Mayhem!

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Markets

What to know:

  • Ah, Bitcoin and the iShares Expanded Tech Software ETF (IGV) have become best pals, with a correlation soaring to 0.73-ByteTree Research has the scoop.
  • One might say, “Bitcoin is just open-source software”-so who knew it would catch the AI bug plaguing its software brethren?

In a world where Bitcoin is increasingly throwing itself into the chaotic embrace of software stocks, one can’t help but snicker. Its latest correction seems to be perfectly synchronized with the broader software sell-off-how charming!

Oh, the sweet romance between Bitcoin and software equities grows fonder! According to ByteTree, on a 30-day rolling basis, our beloved Bitcoin’s correlation with the iShares Expanded Tech Software ETF (IGV) sits at a cozy 0.73. Meanwhile, IGV has stumbled down around 20% this year, while Bitcoin just tripped over a mere 16%.

The IGV, of course, is a hodgepodge of software and services giants like Microsoft (MSFT), Oracle (ORCL), Salesforce (CRM), Intuit (INTU), and Adobe (ADBE)-the crème de la crème, or should we say, the cream that curdled?

While the tech sector prances around seemingly unscathed-look at the Nasdaq 100 (QQQ), only about 4% off its lofty high!-poor old software stocks have taken a beating, with Bitcoin happily joining this waltz into the abyss rather than clinging to the broader index’s coattails.

And why, you ask, are these software names taking such a hammering? Simple: good ol’ AI! The frantic dash towards artificial general intelligence (AGI) is causing quite the existential crisis for the software realm-who’d have thought?

ByteTree chimes in, “There can be no doubt that Bitcoin has been swept up in the technology sell-off. At its core, Bitcoin is an internet stock. Software stocks have been the latest casualties, and Bitcoin’s price has mirrored this tragic performance over the past five years, with a rather high correlation.”

ByteTree also reminds us that the average technology bear market drags on for about 14 months. With this current downturn kicking off in October, it seems the pressure cooker could be simmering well into 2026. But fear not! A sturdy economic backdrop might just lend Bitcoin a helping hand.

“Bitcoin is just open-source software,” quipped Van Eck’s Matthew Sigel, as if that settles it all. Ah, the irony of it all!

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2026-02-04 21:20