Despite positive influences, the capital outflow observed in the cryptocurrency market since mid-last year continues unabated. Recent data highlights a striking correlation between Bitcoin’s price movements and the stock performance of software companies in the United States.
Increasing Correlation with Software Stocks
A report by Grayscale reveals that Bitcoin has been closely mirroring high-growth software stocks since the start of 2024. This shift signals that Bitcoin is evolving from its traditional status as “digital gold” to being recognized as a growth asset.
The data shows that Bitcoin’s price movements have been almost synchronized with US software stocks over the past two years, suggesting that similar factors influence these two markets. According to Grayscale’s analysis, the report suggests:
The simultaneity of Bitcoin’s movement with software stocks during the recent sell-off indicates that the decline results from a general risk reduction in growth-oriented portfolios rather than issues specific to the crypto market.
The Role of US Investors and ETP Movements
The report emphasizes that the selling pressure in the market largely originates from American investors. Supporting this is the fact that Bitcoin trades at a discount on Coinbase compared to Binance.
Additionally, there has been a net outflow of approximately $318 million from Bitcoin ETPs traded in the US since early February. These withdrawals have exerted additional pressure on prices.
The Impact of Private Credit and AI’s Influence
Other analyses suggest that the root of volatility in the crypto market can be traced to the private credit market. Developments in artificial intelligence have recently introduced new risks in the $3 trillion private credit sector.
Private credit refers to loans provided by non-bank financial institutions. Major funds like Blue Owl, Ares, Apollo, KKR, and TPG typically offer loans at higher interest rates to companies with substantial capital needs. The software sector constitutes a significant portion of these loans, accounting for 17% of BDC transactions, according to PitchBook data.
Investors are concerned that AI models developed by companies like Anthropic could reduce traditional software demand. These potential developments may result in customer loss, declines in recurring revenues for software companies, and increased credit defaults. UBS highlights the possibility of default rates in the US private credit market reaching up to 13%.
Although the full impact of artificial intelligence is still uncertain, this trend is expected to accelerate this year.
During periods when the private credit market is under pressure, new loans decrease, early repayment requests rise, or asset sales occur. These measures negatively affect software stocks, reflecting on the crypto market as well. Dan, the Research Director at Coinbureau, a crypto education platform, points out the impact of this pressure starting from mid-2025.
Bitcoin has a strong correlation with software stocks, largely due to the private credit market’s heavy involvement in both the software and crypto sectors, which is under pressure from mid-2025.
Analysts collectively agree that stress in the private credit market acts as an element that, while possibly overlooked by investors, significantly influences crypto prices. Moreover, advancements in AI could introduce new risks to crypto assets.
