The Bitcoin price is trading at $99,000, a solid $10,000 away from its all-time high of $109,000. Nevertheless, Bitcoin has managed to reach a new all-time high, which is perhaps even more important than the price record itself.
It is an all-time high for the realized market value, which now stands at $890 billion.
Why is an all-time high based on realized market value so important?
An all-time high in Bitcoin‘s realized market value is perhaps less visible than a price record, but at least as important. This metric doesn’t consider the current price of each Bitcoin, but rather the price at which each coin was last moved on the blockchain—that is, the amount for which it was bought or sold.
How is it calculated?
The realized cap is calculated by looking at the last known transaction price for each Bitcoin and summing this across all coins in circulation.
For example, if someone bought 1 BTC for $20,000 and has never touched it, that Bitcoin still counts as $20,000 in the realized cap—not the current $99,000.
Why is this so relevant?
This approach reveals much more about the average entry price of investors and thus how much capital has actually been put into the network. A new all-time high in realized market value means that never before has so much ‘real money’ been invested in Bitcoin, based on actual purchase prices. This indicates a broad, healthy, and sustainable bull market.
Furthermore, the realized market value is less susceptible to hype. It does not take into account temporary spikes in which only a small portion of the market is active. For example, if the spot price is far above the realized market value, this could indicate that the market is overheating.
One could say:
A classic all-time high to see what the market now thinks.
A record in realized market value to see what the market has actually done.
Therefore, analysts often consider it a more reliable indicator of the health of a bull market.
[newsletter_form lists="1"]
