AI Fears Hit Software Stocks; What Twain Would Say About Bitcoin

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Things are gittin’ unsettled in the market, friends, and the tall tale is that artificial intelligence might tickle the very gizzard of disruption itself. Software stocks are wobblin’ like a mule on a slick plank, and Bitcoin seems to be taggin’ along, maybe more to keep company than to prove a point.

The broad pullback gnaws at the whole map, and Bitcoin (BTC) ain’t a moonlight dancer immune to the jig-it’s been followin’ the software herd like a duck follows a breadcrumb.

Why Are Software Stocks Down?

According to the Global Markets Investor, the iShares Expanded Tech-Software Sector ETF (IGV) has fallen 15% in February alone, headin’ toward what folks might call its worst month since the Great Crack of 2008. The ETF now tests its April 2025 low and sits about 35% below its peak, which is a tidy way of sayin’ the wagon’s got a loose wheel.

“Software stocks are havin’ their WORST month since the Great Financial Crisis,” the missive read.

Artificial intelligence sits right in the middle of this tumble, with investors sellin’ shares of outfits thought to be ripe for disruption by quicker, craftier machines. Two big stirrings lately have pushed the downturn into a hotter kettle.

On February 20, Anthropic rolled out “Claude Code Security,” a new bit o’ toolkit tucked inside Claude Code. The contraption scans codebases for security gremlins and recommends patches for human skippers, aimin’ to catch what old security tools might miss.

The announcement sparked an immediate ruckus among cybersecurity stocks. According to The Kobeissi Letter, CrowdStrike shed about $20 billion in market value in two turnarounds of the sun, and IBM fell more than 10% in short order.

“The software selloff continues, w/cybersecurity stocks particularly hard hit following the release of Anthropic’s Claude Code Security due to fears that this code-focused tool will change the industry. This indicates that there is nowhere to hide when it comes to software stocks. Even the Goldman Sachs basket of supposedly AI-immune software stocks has come under heavy pressure recently,” said Holger Zschaepitz, Senior Editor at the Economic and Financial desk of the German daily Die Welt and its Sunday edition Welt am Sonntag.

MASSIVE CRASH IN CYBERSECURITY STOCKS SINCE ANTHROPIC LAUNCHED CLAUDE CODE SECURITY.

Over $52.6 billion wiped out in just 2 days.

CrowdStrike is down 20%, wiping out $19.6 billion.

Palo Alto Networks is down 8.9%, wiping out $11.7 billion.

Cloudflare is down 18.5%, wiping out…

– Bull Theory (@BullTheoryio) February 23, 2026

Pressure pressed in again on Monday after Citrini Research published a yarny study. The report sets out a June 2028 dream where AI automation floors corporate profits-and, in the same breath, squawks that white-collar labor could be out on the rain, consumer demand might dwindle, credit could grow stingy, and the whole economy could get sort of odd and bent.

At the same time, it models a heap of disruption to white-collar jobs, dimmer consumer demand, rising credit strain, and structural troubles that could rattle the furniture of the economy.

“What follows is a scenario, not a prediction. The sole intent of this piece is modeling a scenario that’s been relatively underexplored. Hopefully, reading this leaves you more prepared for potential left tail risks as AI makes the economy increasingly weird,” the report read.

I spent 100 hours over the past week researching, writing and editing the piece we just put out.

It’s a scenario, not a prediction like most of our work. But it was rigorously constructed, dismissing it outright requires the kind of intellectual laziness that tends to get…

– Citrini (@Citrini7) February 22, 2026

Once the report hit the street, shares of delivery, payments, and software outfits slid a notch or two lower.

Rising Tech Volatility Tightens Grip on Bitcoin

The ripple isn’t confined to regular stock markets. Grayscale noted that Bitcoin’s price movements lately have kept pretty close to the tune of US software stocks during these selling spells.

A good many market folks point to the correlation between US software stocks and Bitcoin. It suggests that, rather than protectin’ you like a hedge, Bitcoin has sometimes stood as a high-beta sidekick to the tech crowd.

Software stocks are strugglin’ again today. $IGV (iShares Software ETF) is essentially back to last week’s panic lows.

Don’t forget there’s another kind of software, “programmable money,” crypto.

Bitcoin (blue) with the software index (orange).

They are the same thing.

– Jim Bianco (@biancoresearch) February 12, 2026

So, if software stocks keep floppin’, Bitcoin may keep treading water too. A spell of weak growth in the high-flyin’ shares can tighten the money matters-wealth effects, higher equity risk, more choppiness, and a general unhandiness in the lever-liftin’ department across high-beta assets, including them cryptos.

Still, there’s a chance for a divergence. If folks come to view Bitcoin as a monetary hedge against AI-driven labor upheaval, currency debasement, or bold policy cures like a flood of stimulus, its dance with software equities could loosen its steps.

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2026-02-24 13:16