The recent war with Iran has led to remarkable divergences among financial assets. In particular, Bitcoin’s performance began to follow a different course from that of software industry stocks in general. In this process, it was observed that the correlation between the cryptocurrency market and technology-oriented stocks weakened.
Bitcoin’s performance stands out
With the start of the war, Bitcoin, one of the strongest investment tools of the last period, rose more than 5% in a short time and rose above the $ 69,000 level again. It continued its vitality by gaining more than half a point in the last 24 hours.
On the other hand, the IGV index, which represents technology-oriented software sector stocks, experienced a decrease of more than 2% in the same period. This difference shows that investors consider crypto money and sectoral stocks as tools that differentiate from each other in the short term.
In the past, both entities exhibited very close movements to each other. While Bitcoin’s value loss was 26% in the last three months, this rate was 23% in the IGV index. There has been a 21% decrease in both since the beginning of the year.
Correlation and change in market dynamics
In long-term performance, Bitcoin is up 18% in the last five years. In the same period, the increase in the IGV index remained at 10%. However, it was noted that the cryptocurrency showed significant fluctuations in the price movements of the two assets.
When the losses are examined, Bitcoin regained approximately half of its October record, while IGV lost 35% of its value from its peak. The changing dynamics of the correlation between them is also confirmed by the data.
At the beginning of February, the correlation between Bitcoin and the IGV index approached almost 1 and very close movements were observed. However, after the war, this correlation decreased significantly and fell to 0.13. Afterwards, it started to rise again and reached approximately 0.7. The theoretical value range of correlation is between -1 and +1, with a level of 0 indicating no relationship.
IGV stands out as an index in which large software companies such as Microsoft, Oracle and Salesforce have a high weight. As artificial intelligence increases competition in the industry, investors are concerned that the profit margins and valuations of companies, especially in the SaaS field, will be under pressure.
On the other hand, Bitcoin is positioned more as a macro investment tool in an environment of increasing geopolitical uncertainty on a global scale. This trend may cause crypto money to move on a different path in the short term.
