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%.

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.