Bitcoin registered a modest 2% uptick over the past week, yet mounting challenges in the market are making it difficult for the cryptocurrency to maintain upward momentum. Waning activity in spot exchange-traded funds (ETFs) is being interpreted as a sign of diminishing institutional interest. Simultaneously, stagnation in stablecoin supply suggests a slowdown in new inflows of fiat currency, indicating a broader cooling in investor enthusiasm for cryptocurrencies.
Institutional appetite fades and miner supply pressures build
Following the April 2024 halving event, the Bitcoin protocol continues to issue 3.125 BTC per block, resulting in an average daily production of about 450 new coins. According to Bitfinex, the “absorption rate”—a key measure of institutional demand—has dropped substantially, falling from 5.3 at the end of February to just 1.3 currently. This decline points to a significant weakening in large-scale investor participation.
Bitfinex’s recent report highlights that while demand still marginally outpaces new supply from miners, the gap has narrowed to almost negligible levels. Analysts emphasize that at the current pace, demand can now be categorized as passive. For Bitcoin to achieve meaningful price appreciation once again, analysts stress that robust, sustained inflows of capital—similar to those seen at the end of 2024 and the first half of 2025—will be necessary going forward.
Bitfinex analysts wrote, “The current absorption rate of 1.3 places the market in a passive absorption band, where demand is only just exceeding miner supply.”
Rising U.S. yields increase pressure on Bitcoin
A surge in yields on U.S. Treasury bonds and inflation-indexed securities is further dampening the appetite for cryptocurrencies. The yield on the 10-year Treasury Inflation-Protected Security (TIPS) has risen sharply amid recent geopolitical developments, reaching 2.02% this year and climbing as high as 2.12% last week—a level not seen since June 2025.
When real yields move higher, capital tends to flow out of riskier assets that do not generate intrinsic returns. For Bitcoin—classified both as a risk-laden technology asset and, for some, as “digital gold”—this dynamic translates to a two-pronged squeeze. Increasingly, investors are choosing assets that offer stable yields instead of speculative positions in cryptocurrencies.
In their report, Bitfinex emphasized, “Unless the Federal Reserve cuts rates and liquidity rises, higher real yields are likely to drive significant capital outflows from non-yielding instruments such as Bitcoin.”
In the short term, markets expect real interest rates to remain elevated. This expectation is widely seen as a factor that may continue to support the recent market environment and keep upward pressure on yields.
Michael J. Kramer, founder and CEO of Mott Capital Management, drew attention to the rapid rise in 10-year U.S. real yields and pointed to an increasing expectation of financial tightening in market circles. Kramer also highlighted how escalating oil prices are further tightening overall financial conditions, adding another headwind for risk assets.
Kramer stated, “As oil prices rise, financial conditions tighten, and this effect is expected to persist as long as oil continues its upward trend.”
