Stop comparing Bitcoin to gold; it's now just a highly volatile tech stock.

Author: Machines & Money

Translated by: AididiaoJP, Foresight News

Everyone is Asking the Wrong Questions

Since Bitcoin hit a record high of $126,000 on October 6, 2025, it has fallen by 50%.

Meanwhile, gold reached a new all-time high of $5,595 on January 29, 2026.

Since Bitcoin peaked, gold has gained over 25%, while Bitcoin’s price has been cut in half.

The “Fear and Greed Index” in the crypto market dropped to an unprecedented 5 on February 6, a number more extreme than during the COVID-19 pandemic or the FTX exchange collapse. It has only barely rebounded into the teens since then.

Commentators in the crypto space are once again debating: Is Bitcoin really digital gold?

But this question itself is wrong; it assumes Bitcoin’s asset identity is fixed. In reality, Bitcoin’s behavior patterns have changed significantly multiple times under different macroeconomic environments. In 2017, it followed gold; in 2021, it moved with tech stocks; and from late 2024 to now, it has been tightly linked with software stocks.

For institutional investors, a more meaningful question is: Under current liquidity conditions, what factors are actually driving Bitcoin’s movements?

Based on evidence up to February 2026, the answer is: Bitcoin’s current performance is akin to a high-volatility software stock. Whether this is a temporary phenomenon caused by sensitivity to the same macro factors or whether Bitcoin’s role in portfolios has been permanently redefined remains to be seen, but the data is increasingly hard to ignore.

How Strong Is This Correlation? How Long Has It Lasted?

The relationship between Bitcoin and IGV (an ETF tracking software stocks) has become increasingly tight over three different periods:

By late February 2026, their 30-day rolling correlation coefficient reached about 0.73. More importantly, this high correlation (above 0.5) has persisted for over 18 months. This duration clearly exceeds the typical 3-6 months of short-term style shifts but is not long enough to confirm a permanent change across an entire market cycle (4-7 years).

The recent downturn has made this relationship even more apparent. By late February 2026, IGV has fallen about 23% this year, and Bitcoin has dropped around 19-20%. IGV, facing its worst quarter since the 2008 financial crisis, has seen nearly identical movements with Bitcoin over the past month and three months, indicating their gains and losses are very close. During the decline, Bitcoin’s volatility was roughly 1.1 to 1.3 times that of software stocks, lower than many expected (2-3 times).

One point to note: During market turbulence, short-term correlations can spike regardless of actual relationships, as risk appetite declines across the board. But this high synchronization has lasted over 18 months, suggesting there is more than just random fluctuation behind it. However, this does not prove causality or that the relationship will last forever.

2025: A Major Test for “Safe-Haven Asset” Status

If any year could test whether Bitcoin truly hedges against currency devaluation, it’s 2025. That year, fiscal expansion accelerated, the dollar weakened, geopolitical risks increased, inflation remained stubbornly high, and market expectations for Fed rate cuts grew stronger.

This should have been an ideal environment for Bitcoin to demonstrate its “digital gold” qualities. But what actually happened told a different story: gold rose from $4,400 to a new high of $5,595, while Bitcoin fell from $126,000 to over $60,000. These two assets, both claimed to serve as inflation hedges, moved in completely opposite directions when conditions were most favorable for their inflation-hedging roles. The results:

Gold hit a new high of $5,595 on January 29, 2026. Central banks bought 863 tons of gold in 2025, marking the third consecutive year of large-scale purchases. Not a single central bank bought Bitcoin.

This huge divergence in capital flows is the strongest rebuttal to the “digital gold” theory: when major institutions and sovereign funds truly need safe havens to protect against macro risks, they allocated over three times more funds to gold than to Bitcoin.

This does not mean Bitcoin will never become a safe-haven asset. But at this moment, based on current investor structures, market conditions, and liquidity environments, it has not yet fulfilled that role. In 2025, both Bitcoin and tech growth stocks delivered modest single-digit returns, while traditional hard assets performed remarkably well. In this major test, Bitcoin and tech growth stocks exhibited highly correlated behavior, providing strong evidence that “the two are converging.”

Why is this happening? Three structural reasons

1. Changes in Institutional Investment Behavior

The emergence of Bitcoin ETFs has fundamentally altered how institutions trade Bitcoin.

As a result, Bitcoin is now integrated into the same investment decision framework as software stocks. Risk management systems treat them equally, and when adjusting portfolios, institutions often buy or sell both simultaneously. Performance evaluations frequently categorize them within the tech stock basket. When a multi-asset fund finds growth stocks too risky and reduces exposure, it will sell both software stocks and Bitcoin in the same transaction.

This creates a self-reinforcing cycle: because institutions classify Bitcoin as a tech stock, its capital flows align with tech stocks; this, in turn, reinforces its classification as a tech asset. Estimates suggest that the average cost basis for U.S. spot Bitcoin ETF holders is around $90,000. With the current price near $64,000, the entire ETF faces a 25-30% unrealized loss. This cost gap is significant because it turns what might have been long-term holdings into persistent selling pressure. Those who believed buying ETFs could diversify risk or hedge are now watching gold ETFs rise while their Bitcoin holdings suffer losses. Since early 2026, we have seen continuous ETF redemptions, with Bitcoin prices falling in a chain reaction. The outflow duration has set records since ETF inception. For example, just one fund managed by BlackRock, IBIT, has lost over $2.1 billion in the past five weeks.

2. Similar “Sensitivity Points” to Macro Environment

Bitcoin and software stocks are both sensitive to macroeconomic signals: changes in real interest rates, the money supply (M2), Fed monetary policy (printing or tightening), dollar strength, and overall market risk appetite (measured by VIX and credit spreads). They are both “long-duration” assets sensitive to interest rates: when real rates fall, they rise; when real rates rise, they fall. When liquidity is abundant, they benefit; when liquidity tightens, they suffer.

A key question is: does Bitcoin only correlate with software stocks, or does it also correlate with all growth assets sensitive to liquidity? Evidence favors the latter. Bitcoin’s price movements are not driven by the profitability of software companies but by the same macro environment that depresses software valuations—namely, tightening liquidity that also pulls money out of speculative assets. This correlation reflects their shared sensitivity to macro conditions, not an intrinsic sameness.

Sometimes, the transmission mechanism is surprisingly direct. In February 2026, two unrelated AI product launches affected Bitcoin prices through the “institutional pipeline” described above. This is a real-world example of correlation.

The VIX index also illustrates this. When VIX surges due to inflation data, both Bitcoin and software stocks decline. But when VIX drops from elevated levels, they don’t necessarily benefit much. This aligns with the characteristics of high-volatility growth stocks rather than safe-haven assets.

Understanding this distinction is crucial. If correlation merely results from shared macro sensitivity, then a change in macro conditions could decouple Bitcoin from software stocks, even if Bitcoin itself remains unaffected. Past examples include Bitcoin’s correlation with gold in 2017, with tech stocks in 2021, which ended as macro conditions shifted.

3. MicroStrategy’s “Amplifier” Effect

MicroStrategy (formerly Strategy) is the largest publicly traded holder of Bitcoin and is classified as a software/tech company on NASDAQ. This creates a direct, mechanical link, tying the “popularity” of Bitcoin to the performance of the software sector.

This cycle is bidirectional. When the software sector underperforms, MicroStrategy’s stock price declines. Its decline then worsens market sentiment toward Bitcoin, even causing actual selling pressure. During downturns, this loop tightens the relationship between Bitcoin and software indices. Since late 2025, MicroStrategy’s stock has fallen about 67%, far more than the declines in software ETFs or Bitcoin itself. Its market cap now even dips below the value of its Bitcoin holdings, effectively a discounted sale. This shows that, beyond the correlation with software stocks, MicroStrategy’s own dynamics amplify the effect.

In January 2026, MSCI considered removing companies holding more than half their assets in digital assets from certain indices. If implemented, this could force large-scale sell-offs. It highlights how companies like MicroStrategy, with significant Bitcoin holdings, are vulnerable to traditional financial rules. Although MSCI has not yet acted, the risk remains.

What does the future hold? Three possible frameworks

Framework 1: Bitcoin has become a leveraged software stock (identity has changed)

This view argues Bitcoin has been permanently redefined. Evidence includes the high correlation of 0.73 with software stocks, near-synchronous price movements, synchronized ETF capital flows, and shared institutional investors. Under this framework, the ETF era has embedded Bitcoin into tech portfolios, permanently altering its risk profile. This correlation will persist regardless of market cycles.

The problem is, history does not support this. Bitcoin itself has not changed; between 2014 and 2019, its correlation with software stocks was nearly zero. It has also shown high correlation with other assets (like alternative tech coins in 2017-2018, NASDAQ in 2021-2022), but these were temporary. To prove permanence, it must withstand a full cycle of rate hikes and cuts, which has not yet been tested.

Framework 2: Both are simply reflections of “market liquidity” (cyclical convergence)

This simpler explanation states that Bitcoin and software stocks are both “long-duration” assets highly sensitive to liquidity. Their current synchronization is just a result of the “market shortage of money” environment. This began during the 2020 liquidity surge, intensified during the 2022 tightening, and continues now.

According to this view, once the next easing cycle begins (with the Fed resuming liquidity injections), this synchronization could break. Historically, Bitcoin tends to lead by one or two months when policy shifts occur. Additionally, Bitcoin’s “halving” events (which reduce supply) tend to generate bullish phases 12-18 months afterward, possibly causing it to diverge from software stocks by late 2026.

Framework 3: When markets tighten, Bitcoin “groups together” with stocks (behavioral convergence)

Bitcoin is inherently a high-volatility risk asset. During panic sell-offs, regardless of its fundamentals, it tends to behave like stocks. This is driven by “risk-off” sentiment. When VIX spikes, both fall together. Sometimes, major narratives—like fears that AI disruption will devalue tech companies—also impact valuations and risk appetite, further synchronizing them.

On February 6, 2026, the crypto Fear & Greed Index hit a record low, but this was not due to a major event specific to crypto; rather, it reflected a broad sell-off of growth assets driven by macro and tech sector concerns. Ironically, the most pessimistic sentiment in Bitcoin history was caused by the same reasons as software stocks.

Current evidence most supports “Framework 2” (cyclical convergence), but mechanisms described in “Framework 1” (institutional behavior) are also prolonging this synchronization.

What’s Next? Several Scenarios

Honestly, we cannot be certain which will occur. But we can consider all possibilities and look for signals that might rule out some options.

Scenario 1: Correlation persists (the baseline). If liquidity remains tight through 2026, Bitcoin will continue to behave like a high-volatility growth stock, maintaining a correlation of 0.5 to 0.8 with software ETFs. The fundamental question of what Bitcoin truly is remains unanswered. As long as Fed policies, institutional positions, or Bitcoin’s own dynamics stay stable, this is the most likely outcome.

Scenario 2: Divergence occurs. If the Fed begins easing again, combined with the effects of the 2024 halving and reduced fears of AI disruption, Bitcoin could significantly outperform software stocks in late 2026. Its correlation might drop to 0.3-0.5. Such a development would confirm that “cyclical convergence” is only temporary, and the current synchronization is just a phase.

Scenario 3: Permanent convergence. If correlation rises above 0.8 and persists through a full easing cycle, with major indices classifying Bitcoin as a tech asset, it would indicate a fundamental, permanent change in Bitcoin’s identity.

The key test is simple: if correlation breaks during Fed easing, it’s cyclical. If they remain tightly linked despite easing, then “identity has changed” becomes the main explanation.

Until the next easing cycle in 2026-2027 provides an answer, this question remains open.

Conclusion

Bitcoin’s identity has never been fixed. It is always what the mainstream market perceives it to be. Currently, that perception is mainly driven by institutional investors treating it as a growth stock. This could change in the future, but the core nature of Bitcoin remains unchanged. What the market prices it at depends on who holds it and why, not on its original design purpose. Until the next major market shift, this synchronization is the reality. For anyone trying to understand what Bitcoin can do for their portfolio today, reality is everything.