Bitcoin and software stocks, once closely aligned in their trading patterns, have recently begun to move in opposite directions, marking a significant shift in their historical relationship. Over the last five years, Bitcoin was often regarded as a high-beta technology asset, mirroring movements in the software sector. The iShares Expanded Tech-Software Sector ETF (IGV) has served as a key barometer for this sector.
Since mid-May, however, Bitcoin and IGV have diverged sharply. While IGV has seen a rise of approximately 12%, Bitcoin’s value has dipped by about 10%. This represents one of the most substantial disconnects between the two assets witnessed in recent years. Both Bitcoin and IGV reached their all-time highs in October 2025, but they have since entered significant declines, with Bitcoin falling around 50% and IGV approximately 37%.
The downward trend in the software sector has largely stemmed from increasing anxiety regarding the impact of artificial intelligence on traditional software business models. The narrative surrounding a “SaaS apocalypse” has gained traction, leading to considerable selling pressure on major software stocks like Oracle, Microsoft, and Palantir.
Despite this, IGV has shown resilience, recovering impressively since early April with a rally of 36%. The ETF has also reclaimed its 200-day moving average, a crucial technical indicator that suggests a positive long-term trend. IGV closed near 98 on Friday and was trading around 104 in pre-market action on Monday.
In stark contrast, Bitcoin is hovering near $73,000, significantly below its 200-day moving average of $79,388. This disconnection is also reflected in the 20-day rolling correlation between Bitcoin and IGV, which has fallen to 0.58. Previous instances of similar low correlation occurred in October 2023, when Bitcoin was priced around $25,000 before its subsequent rally to $70,000 within six months, and again during the summer of 2024, right before Bitcoin surged past $100,000 following President Trump’s election victory.
Historically, periods of low correlation between Bitcoin and software stocks have not been lengthy. It remains to be seen whether Bitcoin will catch up to the recent momentum exhibited by IGV or if the recovery reflects a temporary trend. For now, the strong momentum observed in IGV suggests that the latter scenario appears less likely.
