bitcoin has risen 2% this week, but unstable supply-demand dynamics and rising “real” interest rates could limit the rally.
Last week, CoinDesk noted that inflows into spot ETFs have cooled, pointing to renewed institutional apathy. Additionally, stablecoin growth has stagnated, indicating a lack of new fiat money inflows.
The figures seem alarming compared to the daily supply or issuance of BTC from mining activity. On average, around 450 new BTC are mined each day based on the current protocol-based issuance schedule that produces 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 mining issuance, has plummeted to just 1.3x from 5.3x at the end of February. This marks a significant deterioration in demand.
“The current reading of 1.3× places the market firmly within this [passive absorption/erosion] band. “Here, demand still marginally exceeds miners’ issuance, but only just,” Bitfinex analysts said in a report shared with CoinDesk.
This means that any significant rally would require strong and consistent inflows, like we saw in late 2024 and the first half of 2025.
Real yields rise
That said, the incentive to put money into an asset like Bitcoin, which lacks inherent yield or cash flow, appears weak as market-determined real interest rates, or inflation-adjusted U.S. Treasury bond 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 actual yield offered by the bonds. As it increases, it tends to move capital away from both risky assets and zero-return assets. Bitcoin ticks both boxes: It is a risk asset tied to an emerging technology and its proponents often compare it to gold.
“Bitcoin’s situation is unlikely to improve without lower Fed rates and healthier liquidity, as rising real yields shift capital away from unprofitable assets,” Bitfinex analysts said.
Furthermore, the market is pricing in elevated real yields for the near term, suggesting this anti-BTC environment could persist.
“Notably, 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 further down the curve,” Michael J. Kramer, founder and CEO of Mott Capital Management, said in a market note on Monday.
He added that oil prices are in the driver’s seat and are weighing on risk assets.
“He [oil rally] “is tightening financial conditions across the entire market complex, a process that will likely persist as long as oil prices continue to rise,” he added.
