Key Points
- Bitcoin’s realized cap has reached a new all-time high, despite a recent 10% correction from its March peak.
- This increase in the realized cap is attributed to active trading and the movement of older coins.
Despite experiencing a correction of more than 10% from its all-time high in March, Bitcoin (BTC) has seen its realized cap hit an all-time high.
This positive development indicates that capital inflows into Bitcoin are continuing at an unprecedented rate.
Understanding Bitcoin’s Realized Cap
The term ‘realized cap’ is used in cryptocurrency analytics to evaluate the total value of an asset. It is calculated by considering the value of each coin in circulation at the price during its last blockchain transaction, instead of the current spot price.
This method takes into account the cost basis of all circulating coins, as the latest transaction typically involves a sale.
Thus, the Realized Cap provides insights into the total capital invested by investors in purchasing Bitcoin.
The Bitcoin Realized Cap has been on an upward trajectory recently, setting new all-time highs. This trend aligns with the surge in Bitcoin’s price to its own all-time highs.
Another major factor contributing to the uptrend in the Realized Cap is the active trading and movement of older coins. Investors may be moving their Bitcoins to realize their profits, resetting the cost-basis of their coins to the current high price levels.
Unprecedented Capital Inflows into Bitcoin
The launch of spot Bitcoin ETFs has led to unprecedented capital inflows into Bitcoin. The newly launched Bitcoin funds in the US have attracted more than $12 billion in net inflows.
The spot Bitcoin ETFs have triggered a surge in institutional inflows into the cryptocurrency. Crypto analysts suggest that selling serves as a bullish catalyst in the market, with the crypto space often thriving on sentiments of fear and doubt.
The strategy proposed is to convince everyone that the halving event was unsuccessful, ultimately driving the market upwards.
