Bitcoin Price Tracks Software Sector's AI Woes, Correlation Hits 0.73

Edgen Crypto

·Feb 04 2026, 19:13

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Key Takeaways

Bitcoin's price action is becoming increasingly tied to the traditional software sector, which is facing headwinds from the perceived existential threat of artificial intelligence. This growing correlation challenges Bitcoin's narrative as a unique, uncorrelated asset and subjects it to the same market pressures as legacy tech stocks.

Bitcoin's 30-day correlation with the iShares Expanded Tech Software ETF (IGV) has reached a high of 0.73, according to a report from ByteTree Research.
Year-to-date, Bitcoin has fallen 16%, closely mirroring the 20% decline in the IGV ETF, even as the broader Nasdaq 100 remains resilient.
Analysts are framing Bitcoin as 'open-source software,' making it vulnerable to the AI-driven sell-off impacting companies like Microsoft and Adobe.

Bitcoin's Correlation to Software Stocks Hits 0.73

Bitcoin is increasingly moving in lockstep with software equities, a sector under significant pressure. According to a February 4 report from ByteTree Research, the 30-day rolling correlation between Bitcoin and the iShares Expanded Tech Software ETF (IGV) has climbed to a high of 0.73. This tightening relationship is reflected in recent performance: while the IGV has declined approximately 20% year-to-date, Bitcoin has fallen 16%. This performance contrasts sharply with the broader tech market, where the Nasdaq 100 is only about 4% below its record high, indicating that Bitcoin is tracking a weaker pocket of the technology sector.

AI Fears Position Bitcoin as a Vulnerable Tech Asset

The sell-off in software is driven by growing concerns that advancements in artificial intelligence represent an existential threat to established software business models. As analysts re-evaluate the sector, Bitcoin is being pulled into the downdraft because it is fundamentally viewed as a software protocol. Van Eck’s Matthew Sigel noted this perspective, stating, "Bitcoin is just open-source software." ByteTree's analysis reinforces this view, adding that "at its heart, bitcoin is an internet stock." The research firm also warns that the average technology bear market lasts about 14 months, suggesting the current downturn, which began in October, could continue to weigh on Bitcoin's price through much of 2026.