Bitcoin Plummets as Correlation with Tech Stocks Intensifies, Raising ‘Crisis of Faith’ Concerns

Bitcoin experienced a sharp decline on Monday, February 23, 2026, falling 35% in the past 24 hours to trade around $65,400 as of noon ET, mirroring a broader sell-off in U.S. Stock markets. This move underscores a growing perception of Bitcoin as a risk asset closely tied to the technology sector, rather than a safe haven asset like gold.

Tech Sector Weakness Fuels Bitcoin’s Drop

The S&P 500 and the Nasdaq 100 both fell more than 1% on Monday, driven by weakness in software and private equity stocks. The iShares Expanded Tech-Software ETF (IGV) dropped 5% to a 52-week low, fueled by concerns that generative AI tools could disrupt traditional software business models, and is down approximately 35% since October. The correlation between Bitcoin’s price movements and IGV has develop into “almost perfect,” suggesting investors are treating cryptocurrencies similarly to software stocks.

AI and Credit Event Fears Add to Downward Pressure

Adding to the bearish sentiment is growing concern that the rise of artificial intelligence could trigger a large-scale negative credit event, reminiscent of the 2008 financial crisis. This anxiety is particularly evident in the performance of private equity firms. Blow Owl Capital (OWL) fell another 3.5% on Monday, bringing its year-to-date losses to 32%. Blackstone (BX), Ares Management (ARES), and Apollo Global Management (APO) all experienced declines between 6% and 8%, continuing a recent trend of heavy losses.

Bitcoin’s Shifting Identity

Cryptocurrencies are increasingly being traded as high-beta alternatives to technology stocks, sensitive to overall liquidity conditions. Monday’s market weakness reflected these dynamics. Bitcoin has remained within a narrow trading range of $60,000 to $70,000, but investor sentiment remains unstable. Joel Krueger, market strategist at LMAX Group, noted that restrictions imposed by the Supreme Court on President Trump’s tariffs have contributed to global uncertainty, prompting investors to reduce exposure to speculative assets like Bitcoin. Krueger stated that Bitcoin is now behaving more like a “high-beta risky investment” than “digital gold.”

Bitcoin’s Performance Lags Traditional Assets

Recent performance data indicates Bitcoin is trailing other major asset classes. According to Bloomberg data from February 5, 2026, Bitcoin has returned roughly 73% since early 2021, lagging behind gold (164%), the Nasdaq 100 (82%), and the S&P 500 (75%). This underperformance challenges the narrative of Bitcoin as a superior long-term investment.

Correlation with US Equities

As of February 17, 2026, the Bitcoin to Nasdaq 100 ratio was 2.68, with a 12-month correlation of 0.16. Newhedge provides a chart tracking the 30-day rolling correlation between Bitcoin and the S&P 500 index.

Key Takeaways

• Bitcoin experienced a significant price drop on February 23, 2026, mirroring declines in the U.S. Stock market.
• The correlation between Bitcoin and technology stocks, particularly software companies, has intensified.
• Concerns about the potential impact of AI on the financial system are contributing to market uncertainty.
• Bitcoin’s recent performance lags behind traditional assets like gold, the Nasdaq 100, and the S&P 500.
• Analysts are increasingly viewing Bitcoin as a risk asset rather than a safe haven.