Bitcoin is increasingly moving in step with the struggling software sector.

Software stocks are facing mounting pressure from the rapid rise of AI, and according to one analyst, Bitcoin is essentially “just open-source software.”

Bitcoin is increasingly behaving like a software stock, with its latest pullback unfolding alongside a broader software selloff.

The connection between Bitcoin and software equities has grown noticeably. On a 30-day rolling basis, Bitcoin’s correlation with the iShares Expanded Tech-Software ETF (IGV) stands at a high 0.73, according to ByteTree. Year to date, IGV is down roughly 20%, while Bitcoin has fallen 16%.

IGV is heavily weighted toward software and services giants such as Microsoft (MSFT), Oracle (ORCL), Salesforce (CRM), Intuit (INTU), and Adobe (ADBE).

While the broader tech sector remains relatively resilient—Nasdaq 100 (QQQ) is only about 4% below its record high—software stocks have absorbed most of the selling pressure. Bitcoin is increasingly tracking this weaker segment of the market rather than the broader index.

The culprit behind the software slump is clear: AI. Rapid progress toward fully functioning artificial general intelligence (AGI) is being viewed as an existential challenge for many software companies.

“There’s no doubt Bitcoin has been caught up in the technology selloff,” said ByteTree. “At its core, Bitcoin is an internet stock. Software stocks have been the most recent casualty, and over the past five years, Bitcoin has exhibited similar performance with high correlation.”

ByteTree also notes that the average tech bear market lasts about 14 months. With this downturn beginning in October, pressure on both software stocks and Bitcoin could persist through much of 2026. Still, a resilient economic backdrop could provide support for the cryptocurrency.

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