Foreign media outlet CoinDesk believes that the correlation between Bitcoin and US software stocks has weakened significantly recently, a divergence that is unusual in the past. The article mentions that the iShares Expanded Tech-Software Sector ETF (IGV), which tracks the software sector, has been rebounding steadily since mid-May, while Bitcoin has weakened during the same period, creating a significant gap in the performance of the two assets in recent years.
Correlation drops to the critical range
Over the past five years, Bitcoin and software stocks have largely moved in the same direction, with the market once viewing Bitcoin as a highly resilient technology asset. However, since May 14, IGV has risen by approximately 12%, while Bitcoin has fallen by about 10%.
CoinDesk, citing data, reports that the 20-day rolling correlation between the two has dropped to 0.58. This level was last seen in October 2023 and the summer of 2024, and both periods were followed by significant price increases for Bitcoin within months.
- In October 2023, Bitcoin was around $25,000.
- In the following six months, the price rose to approximately $70,000.
- After the summer of 2024, Bitcoin once approached $100,000.
Software sector repaired first
The article states that both Bitcoin and IGV reached all-time highs in October 2025, before entering a pullback phase. Bitcoin has fallen approximately 50% from its peak, while IGV has fallen approximately 37%.
The software sector had previously been under pressure due to market concerns about the impact of artificial intelligence on traditional software business models. A narrative surrounding the "pressure on SaaS" deal spread, affecting software stocks such as Oracle, Microsoft, and Palantir.
However, since early April, IGV has rebounded by about 36% and has regained its position above the 200-day moving average. The article states that the fund closed near $98 last Friday and was around $104 in pre-market trading on Monday.
Bitcoin remains weaker than its long-term moving average.
In contrast, Bitcoin is currently trading at around $73,000, still nearly 10% below its 200-day moving average of $79,388. CoinDesk believes this means software stocks are recovering significantly faster than Bitcoin.
The article further points out that such low correlation usually doesn't last long. There are typically only two outcomes: either Bitcoin subsequently catches up with the gains in software stocks, or this rally in software stocks proves unsustainable.
Based on the analysis in the article, the latter scenario seems less likely at present, because IGV has regained its position above the 200-day moving average and its short-term momentum remains strong.
