EXCLUSIVE: $100 Oil, 5% Yields Put Bitcoin ETFs on the Defensive — But XYO's Markus Levin Sees a Tactical Pullback, Not an Exit
Spot Bitcoin ETFs are facing a tougher test as the renewed U.S.-Iran conflict pushes oil above $100 a barrel and Treasury yields toward 5%, creating a more attractive alternative for institutional capital. The funds recorded roughly $463 million in net outflows last week, ending three consecutive weeks of inflows. But Markus Levin, co-founder of dePIN blockvhain XYO, said the reversal looks more like a macro-driven risk reduction than a wholesale retreat from Bitcoin. "The flow reversal came as oil moved above $100, Treasury yields approached 5%, and expectations for Fed tightening jumped," Levin told. "That looks more like investors reducing risk in response to a broader macro shock than simply taking profits after Bitcoin’s rally." 5% Treasury Yield Raises the Stakes The key pressure point for Bitcoin may be the bond market rather than the cryptocurrency itself. The 10-year Treasury yield crossed 5% on Tuesday, its highest level since 2023, increasing the opportunity cost of holding a non-yielding asset such as Bitcoin. "5% on the 10-year Treasury is already an important threshold," Levin said. "If yields remain above 5% while oil stays above $100 and inflation expectations conti
-Iran conflict pushes oil above $100 a barrel and Treasury yields toward 5%, creating a more attractive alternative for institutional capital. The funds recorded roughly $463 million in net outflows last week, ending three consecutive weeks of inflows. But Markus Levin, co-founder of dePIN blockvhain XYO, said the reversal looks more like a macro-driven risk reduction than a wholesale retreat from Bitcoin. "The flow reversal came as oil moved above $100, Treasury yields approached 5%, and expectations for Fed tightening jumped," Levin told.
" 5% Treasury Yield Raises the Stakes The key pressure point for Bitcoin may be the bond market rather than the cryptocurrency itself. The 10-year Treasury yield crossed 5% on Tuesday, its highest level since 2023, increasing the opportunity cost of holding a non-yielding asset such as Bitcoin. "5% on the 10-year Treasury is already an important threshold," Levin said. " Some money exiting Bitcoin ETFs could therefore be moving into cash or Treasuries, while other investors may simply be waiting on the sidelines.
The shift matters because higher Treasury yields give institutions a relatively attractive source of income without taking Bitcoin’s volatility risk. $463 Million Outflow Isn’t Yet a Bitcoin Exit Despite the sharp reversal, Levin cautioned against interpreting the weekly outflow as evidence that institutional investors are abandoning Bitcoin. 8 billion over the previous three weeks, meaning last week’s withdrawals erased only a fraction of those gains. Spot Bitcoin ETFs also remained in positive territory for the month, with roughly $307 million in net inflows through Friday, according to Levin.
"It is still very early to call it a wholesale exit," he said. " Bitcoin’s Safe-Haven Test The episode is also challenging one of Bitcoin’s most persistent investment narratives. Levin said Bitcoin can still serve as a long-term hedge against monetary debasement and currency risk, but that does not necessarily make it a short-term hedge against geopolitical shocks. "When an oil shock simultaneously creates inflation, higher yields, and tighter liquidity, Bitcoin can trade as a risk asset first," he said.
That distinction could become increasingly important if the Middle East conflict keeps energy prices elevated. What Investors Should Watch Next Levin said a genuine deterioration in institutional Bitcoin demand would require several weeks or months of persistent ETF outflows, particularly if Bitcoin prices stabilize or recover but investors continue withdrawing money. He also sees a potentially important divergence between Bitcoin and other crypto ETFs.
"If Bitcoin keeps losing money while investors remain willing to allocate elsewhere in crypto, that would point to a more specific change in Bitcoin demand," he said, noting that Ether ETFs attracted funds last week even as Bitcoin products saw outflows. Over the next six months, Levin sees prolonged higher energy prices as the biggest risk to Bitcoin. "Structurally higher energy prices feeding into inflation and keeping real yields elevated" could make traditional assets increasingly competitive for institutional money.
Conversely, de-escalation in the Middle East, falling oil prices and declining Treasury yields could quickly reverse the defensive positioning and reignite Bitcoin ETF inflows. Read Also: Bitcoin Has No Label but Its Closest Rival Is Gold, BlackRock Exec Says Photo: Shutterstock