The Caladan weekly, Bitcoin is trading like software stocks, here’s why that matters
The question everyone is asking wrong
Bitcoin is down 50% from its October 6, 2025 all-time high of $126,210. Gold hit its own all-time high of $5,595 on January 29, 2026. Since Bitcoin's peak, gold has rallied over 25% while Bitcoin has been cut in half. The Crypto Fear and Greed Index touched an all-time low of 5 on February 6, a reading more extreme than the COVID crash or the FTX collapse, and has barely recovered to the mid-teens since.
The crypto commentariat has defaulted to the usual framing: Is Bitcoin digital gold, or isn't it? But that question assumes a static identity for an asset that has demonstrably shifted its behavioral profile multiple times across different macro regimes. Bitcoin correlated with gold in 2017, with tech broadly in 2021, and...
The more productive question for institutional allocators is simpler and more useful: Under the current liquidity regime, what risk factors dominate Bitcoin's return profile?
The answer, based on the evidence through February 2026, is that Bitcoin is trading as a high-beta software equity proxy.
Whether this represents a temporary alignment driven by shared macro factor sensitivity or a permanent reclassification of what Bitcoin "is" in portfolio construction terms remains an open empirical question. But the data is increasingly difficult to dismiss.
How tight is the correlation, and how long has it lasted?
The relationship between Bitcoin and IGV (iShares Expanded Tech-Software ETF) has strengthened progressively over three distinct periods:
Period | BTC-IGV Correlation | Context |
|---|---|---|
2014-2019 | 0.0-0.2 | Negligible structural linkage |
2020-2023 | 0.4-0.6 | Liquidity beta begins emerging during QE era |
2024-2026 | 0.70-0.92 | Persistent high alignment across multiple quarters |
As of late February 2026, the 30-day rolling correlation sits at approximately 0.73.
More importantly, this elevated correlation has been sustained above 0.5 for over 18 months, which is meaningfully longer than typical short-term regime shifts (which tend to last 3-6 months) but shorter than what would be needed to confirm a full structural reclassification (which would require persistence across an entire liquidity cycle of 4-7 years).
The recent drawdown has made the relationship harder to ignore. Year-to-date through late February 2026, IGV has declined roughly 23%, while Bitcoin has fallen approximately 19-20%. The iShares Expanded Tech-Software ETF is on track for its worst quarterly percentage decline since the 2008 financial crisis. The 1-month and 3-month tracking ratios have hovered near 1.0, meaning Bitcoin has moved almost dollar-for-dollar with the software sector on a percentage basis. The observed beta during drawdown periods sits in the 1.1-1.3x range, which is notably lower than the 2-3x leverage many analysts assume Bitcoin carries relative to equities.
One important caveat: short-window correlations can spike during volatility regimes regardless of underlying structural relationships. Markets tend to become more correlated during stress periods simply because risk appetite contracts uniformly.
The duration of this particular alignment (18+ months and counting) suggests something more substantial than noise, but it does not, on its own, establish causality or permanence.
Author
Derek Lim
Caladan
Derek has held senior leadership positions including Head of Ecosystem at Mantle Network, Head of Research at The Spartan Group’s $100 million Web3 venture-building arm, as well as Head of Research at Bybit, where he special
