Bitcoin Under Pressure: U.S. Bonds Become Its New Rival

The Trial by Fire. After dropping below $58,000 in early July, Bitcoin rebounded to $65,500. However, a new obstacle stands before buyers: U.S. inflation-protected bonds now offer a real yield close to 3%. For the first time in its history, BTC must defend its status as a store of value against such a lucrative sovereign investment.

Key Points

• The real yield on 30-year TIPS is approaching 3%, a peak not seen in about 17 years.
• Bitcoin is consolidating around $65,500 after its July rebound.
• Bitcoin spot ETFs have attracted nearly $1 billion over seven consecutive sessions.
• Oil tensions and high rates could favor a rotation towards bonds.

The real test is not just under the resistance of $67,000 or $68,000. It comes from the bond market. The real yield on 30-year TIPS—bonds whose principal adjusts with inflation—is now approaching 3%, its highest level in about 17 years. Data from the St. Louis Federal Reserve placed it around 2.9% in mid-July.

For long-term investors**, the proposition is hard to ignore**: preserve capital against inflation while earning a real yield, backed by the credit guarantee of the U.S. government. Bitcoin, like gold, does not pay any income. When real yields rise, the opportunity cost of holding it mechanically increases.

The comparison must, however, be nuanced. A 30-year bond remains exposed to rate fluctuations if sold before maturity. Bitcoin, on the other hand, offers permanent liquidity, a capped supply, and a much higher appreciation potential, at the cost of significantly more brutal volatility.

And oil further intensifies the pressure. Its rise, fueled by tensions between the U.S. and Iran, revives inflation expectations and could keep U.S. rates elevated. In this context, a rotation from tech stocks and risky assets to bonds would likely trigger renewed volatility in the crypto market.

Bitcoin ETFs Still Holding the Line

For now, institutional investors are not deserting. U.S. Bitcoin spot ETFs have recorded seven consecutive sessions of positive inflows, totaling around $981 million. This demand helps maintain the price around $65,000 despite increased competition from the bond market.

The signal remains encouraging but is not yet sufficient to validate a sustainable turnaround. Bitcoin is consolidating below $67,000, in reduced summer volumes, after two months marked by significant ETF outflows. The rebound thus still largely depends on these funds' ability to continue their inflows.

The announced decline of BitMEX, which will close in September, simultaneously illustrates the transformation of the sector. The former derivatives giant leaves behind a more institutionalized market, dominated by ETFs, large platforms, and regulated players.

Bitcoin is therefore holding up better than the macroeconomic environment would suggest. But the next test is unlike previous ones: it is no longer just about surviving a crypto bankruptcy or waiting for a halving. BTC must now convince against U.S. debt that protects against inflation while yielding nearly 3% per year in real terms.

Disclaimer: This content is provided for general branding and informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online events, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets or to use any services. Crypto assets are highly volatile and may result in loss. WEEX services and online events may not be available in all regions and are subject to applicable laws, regulations, and eligibility requirements. You are responsible for ensuring that your use of WEEX services complies with local laws and for carefully assessing the risks before participating in any crypto-related activities.