Bitcoin Rally Faces Constraints as Real Yields Rise and Demand Softens
Bitcoin (BTC) has posted a modest 2% gain this week, hovering near $68,489, but weakening demand indicators and rising real interest rates are emerging as key obstacles to further upside.
Institutional participation appears to be losing momentum. Inflows into spot Bitcoin ETFs have slowed notably, while stablecoin supply growth has stalled—both signals that fresh capital entering the market is limited.
At the same time, Bitcoin’s supply continues to expand at a steady pace. Following the April 2024 halving, the network produces roughly 450 BTC per day, based on a block reward of 3.125 BTC issued approximately every 10 minutes. This ongoing issuance is increasingly outpacing visible demand growth.
Bitfinex’s absorption-to-emissions ratio (AER), which tracks demand relative to miner supply, has dropped sharply from 5.3× in late February to just 1.3×. The current level indicates that demand is only slightly exceeding new supply, reflecting a fragile equilibrium rather than strong accumulation.
In this environment, any sustained price appreciation would likely depend on a renewed wave of consistent inflows similar to those observed in late 2024 and early 2025.
Macro conditions are also turning less supportive. U.S. real yields—particularly the 10-year TIPS rate—have climbed more than 30 basis points since late February, reaching around 2.02% and peaking at 2.12%, the highest level since mid-2025.
Higher real yields increase the attractiveness of inflation-adjusted bond returns, raising the opportunity cost of holding non-yielding assets such as Bitcoin. As a result, capital tends to rotate away from both speculative and zero-income assets.
The broader rates market suggests this pressure may persist. The 10-year real yield has been rising faster than the 5-year, signaling expectations of tighter financial conditions and elevated real rates over the longer term.
Additionally, rising oil prices are reinforcing these tighter conditions. Higher energy costs can dampen risk appetite across markets, adding another layer of pressure on Bitcoin and similar assets.
Unless real yields ease or liquidity conditions improve, Bitcoin may struggle to attract the level of demand needed to sustain a stronger rally.
