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A Quantified Look at Bitcoin Monetization


The realized market capitalization of bitcoin is one of the best ways to quantify the monetization process and the metric shows reaccumulation.

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Trends in realized market capitalization

Today we provide a detailed breakdown of realized market capitalization. Traditional asset classes as well as bitcoin itself are often quoted based on their market cap, which is calculated by finding the product of price and circulating supply. With bitcoin and the introduction of a fully transparent set of property rights, you can calculate realized market capitalization, which values ​​each unit of supply at the price it was last moved on the network.

The realized market capitalization of bitcoin is one of the best ways to quantify the asset’s monetization process, as the asset’s infamous volatility seemingly only occurs on the upside. Fluctuations in the exchange rate are not as volatile as the gradual and then sudden appreciation in the realized market value of the asset.

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The realized market capitalization of bitcoin is one of the best ways to quantify the asset’s monetization process, as the asset’s infamous volatility seemingly only occurs on the upside. Fluctuations in the exchange rate are not as volatile as the gradual and then sudden appreciation in the realized market value of the asset.

A Quantified Look at Bitcoin Monetization
Bitcoin has achieved a decline in market capitalization since 2012

Currently, bitcoin’s realized cap is $467 billion, just 0.20% off its all-time high. Despite falling more than 50% from highs since November, bitcoin’s realized market value has only fallen 2.62% from high to low.

A Quantified Look at Bitcoin Monetization
To take a closer look Bitcoin has achieved a decline in market capitalization since December 2019

A thread written in December 2021 extensively covers this dynamic, citing price patterns made during bitcoin market cycles.

We can also break down realized capitalization into different cohorts, including long-term and short-term holders. Beneath the surface, we are witnessing the largest long-term holder capitalization drop in bitcoin’s history.

Although the supply from long-term holders has been fairly neutral year-to-date, rising 0.6% as the accumulation and aging of coins in this group continues, the data shows that there were also a lot of sales. Long-term holders have realized capitalization and realized price declines as higher cost coins are sold. This reduces the overall average cost base which is down 11.49% over the last 30 days.

A Quantified Look at Bitcoin Monetization
Long term bitcoin holders decline in market capitalization realized since 2012
A Quantified Look at Bitcoin Monetization
Long term bitcoin holders decrease in market capitalization realized since January 2020
A Quantified Look at Bitcoin Monetization
30-Day Percentage Change in Bitcoin Realized Price forlong-term holders.

With this data and the process by which long-term holders are quantified, the class of 2021 holders that has recently aged in the cohort are the ones that are shifting their holdings.

Reaccumulation has been our base case since the start of the first quarter of 2022, and the state of these metrics continues to support this market outlook despite the recent increase in selling pressure from long-term holders.

A Quantified Look at Bitcoin Monetization

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.




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