Bitcoin and Software Stocks Part Ways as Market Signals Shift

Software stocks are diverging sharply from bitcoin, disrupting a market relationship that had held for years. Historical patterns suggest, however, that Bitcoin may eventually move back toward the sector’s performance.

The iShares Expanded Tech-Software Sector ETF (IGV) has reached its strongest relative position against bitcoin in the past year, with the IGV-to-BTC ratio rising to 0.0016.

Bitcoin and software shares had generally traded in tandem for years before their correlation began weakening in May. IGV has declined roughly 1% in 2026, while bitcoin has dropped about 29%. The assets’ 20-day rolling correlation has also fallen into negative territory for the first time since May 2024.

The software ETF has recovered strongly since its April low, gaining approximately 40%. At that point, concerns that AI could severely disrupt the software-as-a-service industry triggered a major selloff.

IGV now sits about 13% below its record peak, whereas bitcoin remains nearly 50% below its all-time high.

Bitcoin was previously swept lower during the software sector’s downturn. IGV fell around 40% from its fourth-quarter 2025 high, reflecting the tendency among investors to treat bitcoin as a technology-related risk asset.

Past periods of divergence offer some encouragement to Bitcoin bulls. Negative correlation between the two markets also emerged during Bitcoin’s 2018 bear market, the COVID-19 shock in 2020 and China’s bitcoin mining crackdown in 2021.

In each instance, Bitcoin eventually recovered relative to software stocks and the correlation shifted back into positive territory.

The current split now raises a key question: Will Bitcoin once again catch up with software equities, or has the market entered a new phase in which cryptocurrencies and technology stocks increasingly trade independently?