The strong correlation between Bitcoin and the IGV (software/tech ETF) shows something important: this recent sell-off seems more linked to funding issues than to fundamentals.

The most likely hypothesis is an unwinding of carry trades.

Investors were taking out cheap loans in yen and investing in higher-risk assets seeking yield – software, crypto, even private credit.

The problem: when funding conditions tighten or volatility rises, all these assets start being sold at the same time, regardless of the fundamentals of each one.