Bitcoin and software stocks are breaking up — and history says a major crypto move is coming
Bitcoin and software equities have sharply diverged after moving in lockstep for years, raising questions over whether bitcoin will eventually catch up.
What to know:
- Since April 10, the iShares Expanded Tech-Software Sector ETF (IGV) has rallied 36% and reclaimed its 200-day moving average, signaling a return to a long-term uptrend despite earlier concerns over AI disrupting traditional software businesses.
- Bitcoin’s 20-day rolling correlation with IGV has fallen to 0.58, a level last seen before major bitcoin rallies in late 2023 and mid-2024.
- Previous episodes of similarly low correlation were followed by bitcoin significantly outperforming in the months ahead.
Since May 14, bitcoin and IGV have sharply diverged. IGV has gained roughly 12%, while bitcoin has fallen about 10%, marking one of the largest disconnects between the two assets in recent years.
Bitcoin and IGV reached all-time highs in October 2025 before entering significant drawdowns, with bitcoin declining roughly 50%, while IGV around 37%. The software sector’s weakness was largely driven by growing fears that artificial intelligence would disrupt traditional software business models. The “SaaS apocalypse” narrative gained traction across markets, triggering broad selling pressure in software names such as Oracle (ORCL), Microsoft (MSFT), and Palantir (PLTR).
IGV has staged an impressive recovery since early April, rallying 36% and reclaiming its 200-day moving average, a technical indicator that represents the average closing price over the previous 200 trading days and is often used to gauge a long-term trend. IGV closed on Friday near 98 and was trading around 104 in pre-market action Monday.
