Software stocks are showing unusual strength relative to bitcoin, breaking a correlation that had remained in place for years. Previous market cycles, however, suggest the cryptocurrency could eventually catch up.

The iShares Expanded Tech-Software Sector ETF (IGV) has climbed to its highest level against bitcoin in roughly 12 months, pushing the IGV-to-BTC ratio to 0.0016.

The two assets historically moved in close alignment, but that link began deteriorating in May. IGV has fallen only about 1% since the start of 2026, whereas bitcoin has dropped roughly 29%. The 20-day rolling correlation between them has also moved below zero for the first time since May 2024.

IGV has rebounded approximately 40% from its April low, when investors feared that rapid advances in artificial intelligence could severely disrupt the software-as-a-service industry. The ETF is now around 13% below its record high.

Bitcoin remains considerably further from its peak, trading about 50% below its all-time high.

The cryptocurrency was previously affected by the software sector’s downturn. IGV lost roughly 40% from its fourth-quarter 2025 peak, highlighting how investors often group bitcoin with technology stocks and other risk-sensitive assets.

There are reasons for Bitcoin bulls to remain hopeful. Comparable periods of negative correlation occurred during Bitcoin’s 2018 bear market, the market turmoil triggered by COVID-19 in 2020 and China’s crackdown on bitcoin mining in 2021.

Each of those episodes was eventually followed by Bitcoin narrowing the gap with software stocks, while the correlation between the two returned to positive territory.

The current divergence will therefore be closely watched. It could eventually prove temporary, with bitcoin catching up as it has in previous cycles, or it could represent a more lasting decoupling between cryptocurrency markets and technology equities.