Bitcoin (BTC) and U.S. software stocks show deepening price co-movement

JH Kim

Summary

It reported that the correlation coefficient between Bitcoin (BTC) and U.S. software-related stocks—especially the IGV ETF—rose to as high as 0.73.
Year to date, IGV is down about 20% and Bitcoin about 16%, indicating that weakness in software-heavy tech stocks is also affecting Bitcoin’s price.
ByteTree said an average tech-stock bear market lasts about 14 months, and noted that with Bitcoin’s decline having started in October last year, downside pressure could extend through this year.

Bitcoin (BTC) is increasingly moving in tandem with U.S. software-related stocks, according to analysis. As the tech sector remains in a corrective phase, Bitcoin is showing a similar trajectory.

On the 4th (local time), crypto-focused U.S. media outlet CoinDesk, citing ByteTree Research, reported that the correlation coefficient between Bitcoin and the iShares Expanded Tech-Software Sector ETF (IGV) rose to as high as 0.73. This indicates that the two assets’ price movements have been closely aligned.

IGV is down about 20% year to date, while Bitcoin has fallen about 16% over the same period. The weakness in software-heavy tech stocks is being interpreted as weighing on Bitcoin prices as well.

ByteTree said an average tech bear market lasts about 14 months. Based on that yardstick, given that Bitcoin’s downturn began in October last year, downside pressure could persist through this year, the analysis suggests.

The market is also offering structural interpretations of Bitcoin’s nature. One analyst noted that “Bitcoin’s essence is open-source software,” adding that “Bitcoin may not be entirely immune to the rising artificial intelligence (AI)-related costs and intensifying competition currently facing software companies.”

This line of analysis suggests that Bitcoin is becoming increasingly linked not only to the macro environment but also to specific equity sectors. It is raising the possibility that tech-stock trends could become a key variable for Bitcoin’s near-term direction.

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