Bitcoin Rally Risks Stalling as Real Yields Rise and Inflows Fade
Bitcoin (BTC) is up about 2% this week, trading near $68,489, but a combination of softening demand and rising real interest rates is likely to cap further gains.
Recent flow data points to a slowdown in institutional participation. Inflows into spot Bitcoin ETFs have moderated, while stablecoin supply growth has flattened—both signaling a lack of fresh capital entering the market.
At the same time, Bitcoin’s supply continues to expand at a steady pace. Since the April 2024 halving, roughly 450 BTC are issued daily, based on a block reward of 3.125 BTC every 10 minutes. With demand cooling, the market is no longer absorbing new supply as comfortably as before.
This weakening demand is evident in Bitfinex’s absorption-to-emissions ratio (AER), which has fallen sharply from 5.3× in late February to around 1.3×. At current levels, demand only marginally exceeds miner issuance, suggesting the market has shifted out of a strong accumulation phase.
Without a meaningful pickup in inflows, sustaining upward momentum could prove difficult. A more durable rally would likely require consistent demand similar to the surge seen in late 2024 and early 2025.
Macro conditions are adding to the challenge. U.S. real yields—particularly the 10-year TIPS rate—have risen more than 30 basis points since late February, recently peaking at 2.12%, the highest level since June 2025.
Higher real yields increase the attractiveness of inflation-adjusted bond returns, raising the opportunity cost of holding non-yielding assets like Bitcoin. This dynamic typically drives capital away from both risk assets and alternative stores of value.
Forward-looking indicators suggest these pressures may persist. The 10-year real yield has been climbing faster than the 5-year, reflecting expectations of tighter financial conditions and elevated real rates further out the curve.
In addition, rising oil prices are contributing to broader financial tightening, weighing on overall market risk appetite.
Taken together, fading inflows, steady supply issuance, and rising real yields create a less supportive backdrop for Bitcoin, leaving the market reliant on improved liquidity conditions to sustain further upside
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