Software stocks are facing heightened pressure from the rise of AI, and analysts note that Bitcoin, at its core, is essentially “open-source software.”

Bitcoin has increasingly mirrored software stocks, with its recent correction unfolding alongside a broader tech selloff.

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

IGV is heavily weighted toward major software and services companies including Microsoft (MSFT), Oracle (ORCL), Salesforce (CRM), Intuit (INTU), and Adobe (ADBE).

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

The driving factor is clear: AI. Rapid progress toward artificial general intelligence (AGI) is being viewed as an existential threat to 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 latest casualty, and over the past five years, Bitcoin has closely mirrored their performance.”

ByteTree notes that the average technology bear market lasts about 14 months. With this downturn beginning in October, pressure could persist through much of 2026, though a resilient economic backdrop may still provide support for Bitcoin.