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Bitcoin has returned to the $65,000 range, but the recovery is struggling to develop into a wider rally. The asset traded near $65,975 on Wednesday after briefly crossing $66,000, its highest level since early June.
US spot Bitcoin ETFs recorded $203.2 million in net inflows on Tuesday, marking six consecutive positive days. However, those inflows remain small compared with the combined $6.9 billion withdrawn during May and June.
The main obstacle is no longer limited to the crypto market. Bitcoin now faces pressure from an AI investment boom that is influencing inflation, interest rates, bond yields and competition for investor capital.
Massive Outflows in May and June Shadow the Slow Recovery in US Bitcoin ETFs. Source: SoSoValueThe AI Boom Is Keeping Inflation Alive
The Federal Reserve directly linked some of the recent inflation pressure to artificial intelligence investment in the minutes of its June meeting.
Officials said strong demand for data centers, electricity and high-tech equipment was pushing up prices. They also warned that AI investment could keep economic growth above its sustainable rate, making inflation more persistent.
The latest corporate results show the scale of that demand.
Alphabet raised its expected 2026 capital spending to between $195 billion and $205 billion after Google Cloud revenue jumped 82% in the latest quarter.
Microsoft expects to spend around $190 billion this calendar year, including roughly $25 billion caused by higher component prices.
Meanwhile, Nvidia reported that data-center revenue rose 92% year-on-year to $75.2 billion in its latest quarter. The figures show that companies are still competing heavily for chips, servers, energy, and construction capacity.
Fed Chair Kevin Warsh said high-tech equipment investment had grown by nearly 25% over the year to the first quarter. He said the central bank was watching the effect on inflation and employment.
Higher Rates Leave Less Money for Bitcoin
This matters for Bitcoin because persistent inflation reduces the Fed’s ability to lower interest rates.
US inflation eased in June as energy prices fell. However, consumer prices remained 3.5% higher than a year earlier, while producer prices were up 5.5%.
Both remain above levels that would give the Fed a clear reason to ease policy quickly.
Bond markets have responded. The two-year Treasury yield reached 4.301% on Wednesday, its highest level in more than a year, while the 10-year yield approached 4.66%.
Higher yields make government bonds and cash more attractive compared with volatile assets such as Bitcoin.
Nikita Zuborev, senior analyst at BestChange, described the same pressure.
“For now, an expensive dollar and high bond yields are pulling liquidity away from risky assets such as cryptocurrencies,” he said.
The dollar has also received support from higher rate expectations and renewed Middle East tensions. That creates another problem for Bitcoin, which often struggles when the dollar strengthens.
AI Stocks Are Competing for the Same Capital
Evgeny Popov, editor-in-chief at InvestFuture, said capital that previously might have entered crypto was moving toward companies linked to AI, chips, data centers and energy infrastructure.
“That is where investors currently see money, growth and a clearer story about the future,” Popov said.
Market performance broadly supports his argument. Semiconductor stocks remained up around 69% for 2026 as of this week, while Bitcoin was still down about 25% for the year.
Bitcoin has performed better than chip stocks during July, suggesting some capital may be rotating back, but the longer-term gap remains wide.
Bitcoin may need more than several days of ETF inflows to break out of the $60,000 – $70,000 zone. A stronger move would likely require lower inflation, falling bond yields, a less hawkish Fed and sustained institutional demand.
The Fed’s next decision is due on July 29. Until then, Bitcoin remains caught between improving ETF flows and an AI investment cycle that is keeping money expensive.
The post Why Bitcoin Is Stuck Near $65,000 as AI Fuels Inflation appeared first on BeInCrypto.
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