Bitcoin's correlation with troubled software stock sector is growing
Analysis
Price Impact
HighBitcoin's correlation with the troubled software stock sector (igv), which is facing existential threats from ai and is down 20% ytd, has risen to 0.73. this strong correlation means btc is likely to follow the downward trend of these stocks.
Trustworthiness
HighAnalysis is based on data from bytetree research and insights from van eck, citing specific correlation figures (0.73) and the performance of the ishares expanded tech software etf (igv).
Price Direction
BearishBitcoin is increasingly behaving like a software stock, which is currently experiencing a significant sell-off due to ai concerns. its latest correction aligns with the broader software sector's decline, suggesting continued downward pressure if the correlation persists.
Time Effect
LongBytetree notes that average technology bear markets last about 14 months. with the current downturn starting in october, this suggests potential pressure could persist through much of 2026.
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Article Content:
Markets Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Bitcoin's correlation with troubled software stock sector is growing Software stocks are thought to be facing an existential threat from the rise of AI, and Bitcoin, noted one analyst, is just open-source software. By James Van Straten | Edited by Stephen Alpher Feb 4, 2026, 4:26 p.m. Make us preferred on Google BTC vs IGV (TradingView) What to know : Bitcoin's correlation with the iShares Expanded Tech Software ETF (IGV), has risen to 0.73, noted by ByteTree Research. At its core, suggested another analyst, Bitcoin is just open source software, so maybe not immune to the AI issues facing software stocks. Bitcoin is increasingly behaving like a software stock, with its latest correction unfolding alongside the broader software sell-off. The relationship between bitcoin and software equities has strengthened notably. 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 . The IGV is down around 20% year to date, while bitcoin has fallen 16%. STORY CONTINUES BELOW Don't miss another story. Subscribe to the Crypto Daybook Americas Newsletter today . See all newsletters Sign me up By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy . 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 around 4% below its record 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 getting hammered, the answer is simple: AI. The rapid progress towards fully functioning artificial general intelligence (AGI) is currently being considered an existential issue for software. “There can be no doubt that bitcoin has been caught up in the technology selloff," said ByteTree. "At its heart, bitcoin is an internet stock. Software stocks have been the most recent casualty, and the price of bitcoin has shown similar performance over the past five years, with high correlation.” ByteTree also notes that the average technology bear market lasts about 14 months. With this current downturn having started in October, this suggests pressure could persist through 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 . Bitcoin News Technology