On February 24, Bitcoin (BTC) retreated to around $65,400 during Monday's US trading session, following its failure to maintain a mild overnight rebound. This movement was highly synchronized with a collective crash in the US stock software sector and the private equity market. As investors accelerated their exit from speculative areas, Bitcoin's current performance more closely resembles that of a "high-beta risk instrument" rather than the "digital gold" the market had placed high hopes on.
The core driver behind this round of decline is the systemic collapse of the software sector. Relevant data shows that the iShares Expanded Tech-Software ETF (IGV) plunged another 5% today, hitting a new 52-week low, and has lost nearly 35% of its market value since last October. There is widespread market concern that generative AI tools will disrupt the profit logic of traditional software, and the current market consensus tends to view crypto assets as an extension of the software ecosystem. This logic has led to the price fluctuations of Bitcoin and IGV reaching an almost "perfect positive correlation."
The liquidity crisis in the private equity sector has further intensified panic. As giants like Blue Owl Capital and Blackstone hold massive positions in the software industry, the continued sharp decline in their stock prices reflects extreme market concern over a credit event similar to 2008. The ongoing devaluation of private equity stakes is triggering a broader liquidity run, which undoubtedly presents a significant headwind for the crypto market, which is highly dependent on active capital.
Furthermore, external policy turmoil has provided an excuse for selling. In a typical "risk-off" environment triggered by uncertainty over tariff policies, speculative capital is prioritizing withdrawal from cryptocurrencies. Although Bitcoin is still struggling within a wide range of $60,000 to $70,000, fragile risk appetite makes it difficult to form effective support levels.
Bitcoin will find it challenging to stage an independent rally until the valuation reset in traditional tech software and the credit risk clearance in private equity are complete. Investors should closely monitor signs of stabilization in benchmark indices like IGV, as the risks of blindly betting on a rebound are significantly increasing within the current liquidity trap.
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