Store of Value or Software Beta: The Tech Equity Lens on Crypto Markets

What initially began as a digestion phase following the AI-fueled exuberance has evolved into a broader rotation out of high-beta technology exposure. 

Most of the S&P 500’s sectors are positive in  the year to date, while technology is one of the laggards. Meanwhile, defensive sectors such as consumer staples and utilities have outperformed, signaling a decisive pivot in market perceptions and hence in asset allocations toward balance-sheet stability and earnings visibility. 

The inflection point came with Anthropic’s release of Claude Cowork - not merely a conversational model, but an agent capable of taking action. Instead of just responding to prompts, it interacts with files, streamlines processes, and completes tasks that traditionally depended on specialized software platforms and manual oversight. 

And crypto has not been immune. 

Bitcoin and broader digital asset markets have struggled alongside the AI and software complex, trading less like an uncorrelated store of value and more like a high-beta extension of growth equities. Rather than decoupling amid macro uncertainty, crypto has moved in tandem with the very segment of the equity market now under pressure. 

Digital assets as software systems 

At first glance, the strong correlation between Bitcoin and a software ETF like Blackrock’s IGV may seem slightly stretched. 

One is positioned as sovereign money; the other is a basket of software-as-a-service and cloud infrastructure companies. But beneath the surface, both sit within the same structural bucket in modern portfolio construction: long-duration innovation assets.  

Strip away the monetary rhetoric, and what remains is technology. Public blockchains are distributed software networks. They run code. They process transactions. They secure state through cryptography. They enable programmable logic via smart contracts. They rely on developer ecosystems, protocol upgrades, infrastructure layers, and user adoption curves - all hallmarks of software platforms. 

Bitcoin itself is open-source monetary software. Ethereum is programmable infrastructure. Layer-2s, rollups, DeFi protocols are effectively financial software running on decentralized operating systems. 

From an allocator’s perspective, that puts digital assets closer to high-growth software platforms than inert commodities. Their value is not derived from discounted cash flows today but from expectations of future network adoption, ecosystem expansion, and structural integration into the global financial stack. 

Assets priced on future adoption behave like long-duration equities. Their sensitivity to interest rates and liquidity conditions is inherently higher because their perceived value lies further out on the time horizon. 

Over the past years, their price trajectories have shown striking similarity, accelerating during liquidity expansions, compressing sharply during tightening cycles. 

When AI enthusiasm fueled tech multiples, crypto rallied alongside it. And the same applied when the AI complex began to reset amid concerns about valuation excess, capex-heavy buildouts and slower monetization.

Correlation or causation? 

The IGV–Bitcoin correlation story is, to a large extent, a side effect of Nasdaq movements. 

IGV and Nasdaq move together almost structurally. Their rolling 30-day correlation averages around 0.87. Software is not an independent macro factor; it is a subsegment of the growth equities market. When Nasdaq moves, IGV follows, often with a higher beta. 

Because Bitcoin itself has been tightly correlated to Nasdaq in recent regimes, IGV’s correlation with Bitcoin is therefore not surprising. It is largely mechanical. 

If A is correlated with B, and B is correlated with C, then A will appear correlated with C. 

This is why overemphasizing the "software–crypto convergence" narrative can be misleading. The apparent IGV–Bitcoin linkage is, in many instances, simply an extension of the broader Nasdaq–Bitcoin relationship. 

That said, correlation structures are not static. 

Historically, the software segment has periodically decoupled from broader tech. Mid-2024 is a clear example, when software underperformed the broader technology index for a sustained period. Today, we are again in such a phase. Within the tech complex, software has broken down relative to the broader Nasdaq, dropping roughly 22% year-to-date after decoupling in early December, while the broader index has remained comparatively more resilient. 

Idiosyncratic volatility under pressure

What makes the current episode notable is that software’s idiosyncratic volatility - the portion of its moves not explained by Nasdaq - is at its highest level in five years alongside a spiking beta to around 1.50. That signals that the pressure is highly concentrated in the software segment rather than evenly distributed across tech. 

Valuations had expanded aggressively on AI optimism. Massive capex commitments have compressed forward cash flow visibility, notably on Oracle, a leading heavyweight within the software index. Fears of near-term AI disruption have weighed on parts of the application layer. US software engineering employment, after peaking in 2022, has fallen back toward pandemic levels, reflecting both post-hiring normalization and productivity reassessments, prompting a repricing of software duration and business model risk. 

But this brings us back to Bitcoin. If we move from simple correlation to explanatory power, the regime shift becomes clearer. 

Since the 10 Oct liquidations, something has fundamentally changed in Bitcoin’s behavior, leading it to be increasingly priced as a US macro asset. 

In the nine trading days preceding that date, Bitcoin’s R² - measuring how much of the variation in one asset’s returns can be statistically explained by the movements of another - relative to Nasdaq averaged around 12%. 

On 10 Oct, the latter jumped to 38.5%. By mid-November, it peaked above 60%, signaling a clear step change into a macro-dominant regime. 

Bitcoin as a macro asset

The data show that during stress episodes, the linkage intensifies further. During broad sell-offs and policy shocks, Bitcoin behaves almost mechanically as a U.S. macro asset. IGV’s correlation during those periods does not add much incremental information; it largely mirrors Nasdaq with higher volatility.  

In that sense, IGV behaves more like a leveraged proxy for the technology growth factor than an independent explanatory variable, despite recent claims of a distinct, stand-alone correlation between software and crypto. 

The same pattern holds when running the numbers on altcoins. A basket of major Layer-1 assets shows low-to-moderate explanatory power versus Nasdaq and Software in calm regimes, but during macro stress, correlations tighten sharply.  

But the situation is different from the latter. Bitcoin remains the primary transmission channel. Because altcoins are tightly linked to Bitcoin, they become indirectly correlated to Nasdaq as well, and even for assets that are closest to “software” in nature, Nasdaq still dominates the explanatory power by extension. 

It's all about the window

Breaking down the relationship into where the bulk of the correlation sits, it appeared that at higher timeframes (daily and above), there is no consistent leading indicator - one market systematically moving first in a way that helps predict the next move in the other - between tech equities and Bitcoin. 

At those horizons, neither Nasdaq nor Bitcoin reliably leads. Both tend to react simultaneously to macro developments: rate expectations, liquidity shifts, policy headlines, or broad risk sentiment. 

At the hourly level, Nasdaq starts to exhibit a small but notable short-term leadership over Bitcoin, but in a very specific window. The effect is concentrated between 15:00 and 18:00 UTC - the core of the U.S. cash session – and at peak, Nasdaq explains roughly 14% of Bitcoin’s subsequent hourly price movement over the past two years, while the vast majority is driven by Bitcoin’s idiosyncratic factors. 

During those hours, data suggests a simultaneous reaction to the same macro and liquidity impulses, particularly when positioning, ETF flows, and headline risk are concentrated. 

Crucially, this leadership fades quickly. Once the lag extends beyond roughly one hour, the explanatory power collapses. Outside U.S. trading hours, the relationship weakens further and loses statistical consistency.  

The explaining variable is the Bitcoin Spot ETF era. The rise of US spot ETFs, particularly IBIT, has concentrated price discovery within American trading sessions. At current scale, ETF creation and redemption flows have become a dominant liquidity mechanism, explaining why US equity volatility and liquidity impulses increasingly transmit directly into Bitcoin during market hours, as the market structure itself reinforces macro linkage. 

Bitcoin and  the "safe haven" thesis 

Recent weeks have been difficult for the digital gold narrative. 

While commodities have rallied and gold has pushed higher, Bitcoin has lagged, erasing its year-to-date gains. In a period that should, in theory, favor alternative stores of value, BTC has not behaved like one. Its place within the “safe haven” thesis is once again being questioned. 

On a 30-day rolling basis, gold is not a dominant driver of Bitcoin returns. The statistical linkage between the two is generally weak. Even during the strongest observed window - in early January 2025 - gold explained at most roughly 32% of Bitcoin’s price variation. Most of the time, that figure is far lower. 

Put differently, the BTC–gold relationship is episodic rather than structural. Typical 30-day readings sit in the single digits to low teens. That implies nearly 100% of Bitcoin’s variance is idiosyncratic relative to gold. 

Even at peak linkage over the past years, roughly two-thirds of Bitcoin’s price behaviour remained unrelated to gold - largely driven by either broad risk-on or risk-off phases, when most assets tend to move together rather than reflecting a structural store-of-value alignment. 

This materially challenges the digital gold framing, at least in the current regime. 

If Bitcoin was functioning primarily as a store of value or safe haven, one would expect a more stable and persistent co-movement with gold - particularly during periods of macro uncertainty. 

Instead, Bitcoin has been far more sensitive to the same forces driving growth equities: real yields, liquidity conditions, duration repricing, and shifts in innovation sentiment.