Bitcoin and software stocks have moved roughly in lockstep for most of the past five years, treating BTC as a high-beta technology asset.
iShares Expanded Technology Software Sector ETF (IGV) has served as one of the best agents for the software sector. However, that relationship seems to have broken down.
Since May 14th, Bitcoin and IGV have sharply diverged. IGV is up about 12%, while Bitcoin is down about 10%, one of the biggest divergences between the two assets in recent years.
Bitcoin and IGV entered a significant drawdown after reaching all-time highs in October 2025, with Bitcoin falling by about 50%, while IGV fell by about 37%. The software sector’s weakness was primarily due to growing concerns that artificial intelligence would disrupt traditional software business models. The “SaaS apocalypse” story has garnered attention across markets, causing widespread selling pressure on software names like Oracle (ORCL), Microsoft (MSFT), and Palantir (PLTR).
IGV has seen an impressive recovery since early April, rising 36% and regaining its 200-day moving average. The 200-day moving average is a technical indicator that represents the average closing price over the past 200 business days and is often used to measure long-term trends. IGV closed around $98 on Friday, but was trading around $104 in pre-market trading on Monday.
In contrast, Bitcoin is trading near $73,000, nearly 10% below its 200-day moving average of $79,388.
The 20-day rolling correlation between Bitcoin and IGV has dropped to 0.58. The last notable period of similarly low correlation occurred in October 2023, when Bitcoin was trading around $25,000, then rose to $70,000 over the next six months, and again in the summer of 2024, just before Bitcoin surged toward $100,000 following President Trump’s election victory.
Historically, periods of low correlation like this have not lasted long. Either Bitcoin will eventually catch up to software stocks, or IGV’s recovery will prove to be false. For now, the latter scenario seems unlikely given IGV’s strong momentum and above its 200-day moving average.
