Bitcoin: The Unlikely Lovechild of Tech Stocks and Digital Gold!

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Ah, the perennial enigma of Bitcoin! It seems that even the most astute financial wizards are scratching their heads in bewilderment, for the internal factors such as ETFs and DATs only half-heartedly attempt to explain the curious phenomenon of capital slipping through the cracks since last summer. Lo and behold, the correlation between Bitcoin and US software stocks has emerged as a rather amusing twist in this tale.

Recent data, like a mischievous sprite, has revealed how private credit now wields considerable influence over the crypto realm, leaving our dear Bitcoin in quite the perplexing position.

The Curious Case of Bitcoin and US Software Stocks

A recent Grayscale report, like a sage oracle, suggests that Bitcoin’s price movements have been pirouetting in tandem with high-growth software stocks. It appears our beloved BTC is donning the garb of a growth asset rather than its supposed identity as “digital gold.” Who would have thought?

The chart from Grayscale is a sight to behold indeed, showcasing the synchronized dance between US software stocks and Bitcoin from early 2024 to the present. One might say they were joined at the hip-if only one could find a good therapist for such relationships!

“The fact that Bitcoin moved in lockstep with software stocks during the latest sell-off suggests that the drawdown likely had more to do with broad derisking of growth-oriented portfolios rather than problems unique to crypto,” Grayscale mused, as if contemplating the meaning of life over a cup of tea.

Identifying this shared driver helps unravel the mystery behind the recent crypto downturn, illuminating a path toward potential recovery, assuming one can find their way out of the fog.

Grayscale, in its infinite wisdom, attributes the selling pressure primarily to US investors-a veritable parade of capital waving goodbye as Bitcoin trades at a discount on Coinbase compared with Binance. What a spectacle!

Furthermore, US-listed Bitcoin ETPs have experienced net outflows of approximately $318 million since early February. This exodus has added further strain to prices, much like a heavy coat on a hot summer day.

The Heart of Darkness: Private Credit

But wait! There’s more! Other reports point to a deeper, darker cause lurking beneath the surface. The $3 trillion private credit industry now finds itself grappling with new risks ushered in by the relentless march of AI development.

Private credit, which sounds like the name of an exclusive club for fiscally-minded wizards, refers to non-bank lending. Large funds like Blue Owl (OWL), Ares (ARES), Apollo (APO), KKR, and TPG hold court over these loans, doling them out to private companies or those capital-hungry enterprises, often at interest rates that would make any banker weep with envy.

Software, it seems, occupies a prominent place at this feast of loans. PitchBook data reveals that software constitutes about 17% of BDC investments by deal count, second only to commercial services. Quite the buffet!

Oh, the drama! Data indicates that the connection between software stocks and Bitcoin has persisted for more than five years. This isn’t just a fleeting romance; it’s a long-term commitment, akin to a couple living together but refusing to tie the knot. The influence of private credit flows on the crypto market cannot be denied, as funds treat Bitcoin and altcoins as if they were the next big software sensation.

“BTC is behaving like a high beta tech asset, driven by liquidity, growth expectations, and valuation cycles within the software market,” commented Joao Wedson, founder of Alphractal. “That also means the AI sector has direct points of conflict with Bitcoin, something very few are talking about.” Truly a tangled web we weave!

As concerns about AI reach a fever pitch, models like Anthropic’s Claude Opus 4.6 and automated coding tools threaten to siphon away demand for traditional software. Investors tremble at the thought of software companies losing customers. Recurring revenues may plummet faster than a lead balloon, potentially leading to defaulting loans. Oh, the horror!

UBS, with its crystal ball, warns that private credit default rates in the US could soar to an alarming 13%. Well, isn’t that just delightful?

“It is still too early to say when exactly AI disruption plays out at scale, but we believe that the trend is set to accelerate this year,” UBS strategists advised, perhaps while sipping on a calming herbal tea.

When private credit feels the heat, capital conditions tighten like a noose. New lending comes to a screeching halt, early repayments are demanded, and assets are sold off quicker than you can say “financial crisis!” These actions, alas, hurt software stock performance and spill over into the crypto market like an unwanted guest at a dinner party.

Dan, the Head of Research at Coinbureau, a crypto education firm, argues that the pressure from private credit has been brewing since mid-2025. This explains why BTC began to wander off from the liquidity party around that time, leaving us all to ponder its fate.

“Bitcoin has a strong correlation to software stocks, but what is the shared cause? It’s private credit, which is heavily involved in crypto and software, and has experienced stress since mid-2025, hence why BTC decoupled from liquidity in mid-2025,” Dan opined, as if unveiling the secrets of the universe.

These insights from analysts shed light on a driver that many investors may have overlooked, lurking in the shadows like a cat ready to pounce. This factor has weighed heavily on the crypto market in recent months, revealing a broader risk associated with private credit defaults while offering a fresh perspective on how AI advancements might rain on Bitcoin’s parade.

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2026-02-10 15:16