For months, investors have searched for a clean explanation for why money keeps leaking out of the crypto market despite seemingly positive internal tailwinds like ETFs and expanding derivatives activity. Now, a growing body of evidence points to an unexpected culprit — and it has little to do with blockchains themselves.
Bitcoin is behaving less like “digital gold” and more like a high-growth software stock, and the pressure weighing on both markets appears to originate from the same place: private credit.
Bitcoin’s Surprising Twin: US Software Stocks
A recent report from Grayscale highlights a striking pattern. From early 2024 to today, Bitcoin’s price movements have closely mirrored those of US software stocks, particularly high-growth names.
The synchronization is so tight that during recent sell-offs, Bitcoin fell in near lockstep with the software sector.
That matters because it reframes the entire crypto drawdown.
“The fact that Bitcoin moved in lockstep with software stocks during the latest sell-off suggests the drawdown likely had more to do with broad derisking of growth-oriented portfolios rather than problems unique to crypto,” Grayscale noted.
In plain terms: investors weren’t fleeing Bitcoin because they lost faith in crypto — they were pulling back from growth risk across the board.
This shared behavior also suggests that Bitcoin’s recovery may depend less on crypto-specific catalysts and more on what happens next in global tech and credit markets.
The US Is Doing the Selling
The selling pressure appears to be heavily US-driven.
Bitcoin has been trading at a discount on Coinbase compared with Binance, a signal often interpreted as US investors exiting positions faster than their offshore counterparts. At the same time, US-listed Bitcoin ETPs have seen roughly $318 million in net outflows since early February, adding persistent downside pressure.
That combination tells a clear story: institutional and professional capital in the US is stepping back — not just from crypto, but from risk assets broadly.
The Deeper Layer: Private Credit Takes Center Stage
Zoom out further, and another trend emerges — one that links software stocks, Bitcoin, and AI anxiety under a single umbrella.
The $3 trillion private credit industry has quietly become a dominant force behind capital flows in both software and crypto.
Private credit refers to non-bank lending provided by large investment firms such as Ares, Apollo, KKR, TPG, and Blue Owl. These funds lend heavily to private companies, often at higher rates than banks, and software companies represent one of their largest exposures.
According to PitchBook, software accounts for about 17% of Business Development Company (BDC) investments by deal count, second only to commercial services.
This matters because stress in private credit doesn’t stay contained — it ripples outward.
A Five-Year Pattern Few Noticed
Data shows that the correlation between Bitcoin and software stocks isn’t new. It has persisted for more than five years, reinforcing the idea that sophisticated capital treats crypto assets less like commodities and more like venture-scale tech investments.
“BTC is behaving like a high beta tech asset, driven by liquidity, growth expectations, and valuation cycles within the software market,” said Joao Wedson, founder of Alphractal. “That’s how smart capital truly sees Bitcoin.”
That framing also exposes a new vulnerability: AI.
AI: A New Threat to Software — and Crypto
As artificial intelligence accelerates, investors are growing uneasy about the future of traditional software businesses. Advanced models like Anthropic’s Claude Opus 4.6 and increasingly capable automated coding tools threaten to reduce demand for conventional software products.
The fear isn’t abstract. If AI reduces customer reliance on legacy software:
Recurring revenues could fall
Cash flows could weaken
Private credit loans could default
UBS has warned that private credit default rates in the US could climb as high as 13%, a level that would send shockwaves through portfolios exposed to leveraged tech and growth assets.
“It is still too early to say when exactly AI disruption plays out at scale, but we believe the trend is set to accelerate this year,” UBS strategists said.
When Credit Tightens, Crypto Feels It
When private credit comes under strain, funds don’t just absorb losses — they cut new lending, demand repayments, and liquidate assets. That tightening hits software valuations first and spills directly into crypto markets.
According to Dan, Head of Research at Coinbureau, this pressure has been building quietly for months.
“Bitcoin has a strong correlation to software stocks, but what is the shared cause? It’s private credit,” he said. “Private credit has experienced stress since mid-2025, which explains why BTC decoupled from liquidity around that time.”
In other words, even as global liquidity indicators looked supportive, Bitcoin stopped responding — because the real constraint was happening inside private markets.
A Different Way to See the Crypto Slump
This lens offers a fresh explanation for recent crypto weakness. It’s not primarily about regulation, ETFs, or on-chain fundamentals. It’s about credit risk, AI disruption, and how institutional capital categorizes Bitcoin.
Rather than a standalone asset class, Bitcoin is being traded as part of the software–growth–liquidity complex. When private credit tightens and software stocks wobble, crypto gets dragged along for the ride.
For investors, the implication is sobering but clarifying:
Bitcoin’s next major move may depend less on crypto narratives — and more on whether private credit stress eases or explodes.
As AI reshapes software economics and credit markets brace for potential defaults, crypto may be facing a headwind few saw coming — and even fewer fully priced in.