Bitcoin jumped 2% this week, but fragile supply-demand dynamics and rising “real” interest rates could limit the recovery.
Last week, CoinDesk noted that inflows into spot ETFs had cooled, highlighting renewed institutional apathy. Additionally, stablecoin growth has stalled, indicating a lack of new fiat capital flows.
The numbers seem alarming when compared to the daily supply or issuance of BTC from mining activity. On average, approximately 450 new BTC are mined each day under the current issuance schedule based on the protocol producing a new block approximately every 10 minutes, with a reward of 3,125 BTC per block since the April 2024 halving.
Bitfinex’s absorption-to-emissions ratio (AER), which measures institutional demand relative to miner emissions, collapsed to just 1.3x from 5.3x at the end of February. This marks a significant deterioration in demand.
“The current value of 1.3x places the market firmly in this range. [passive absorption/erosion] band. Here, demand still slightly exceeds miner emissions, but only just,” Bitfinex analysts said in a report shared with CoinDesk.
This means that any significant recovery would require strong and consistent capital inflows – like those we saw in late 2024 and the first half of 2025.
Rising real yields
That said, the incentive to put money into an asset like Bitcoin, which lacks inherent yield or cash flow, appears low as market-determined real interest rates, or inflation-adjusted U.S. Treasury yields, continue to rise.
The yield on 10-year inflation-protected securities (TIPS) has risen more than 30 basis points to 2.02% since the United States and Israel first attacked Iran on February 28. The yield hit a high of 2.12% last week, the highest since June 2025.
This yield represents the real yield offered by the bonds. As it increases, it tends to divert capital away from both risky and zero-yielding assets. Bitcoin checks both boxes: it is a risk asset linked to emerging technology and is often compared to gold by its supporters.
“The Bitcoin situation is unlikely to improve without a Fed rate cut and healthier liquidity, as rising real yields drive capital away from non-yielding assets,” Bitfinex analysts said.
Additionally, the market is pricing in high short-term real yields, suggesting that this anti-BTC environment may persist.
“In particular, the 10-year real yield is rising faster than the 5-year real yield, implying that the market is pricing in tighter financial conditions and higher real rates over the long term,” Michael J. Kramer, founder and CEO of Mott Capital Management, said in a market note Monday.
He added that oil prices are in charge and weighing on risk assets.
“He [oil rally] “The tightening of financial conditions across the market is a process that is likely to persist as long as oil continues to rise,” he added.
