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The Daily Dive #057 - $220 Billion In Realized Gains For Bitcoin In 2021

The Daily Dive #057 - $220 Billion In Realized Gains For Bitcoin In 2021

Over the course of 2021, $220 billion of profit has been realized on the Bitcoin network, more than 100% greater than the realized capitalization of the network before the year started.

Below is the net realized profit/loss daily on the network:

Bitcoin: Net Realized Profit/Loss 

With realized capitalization, you see the aggregate price paid for every coin (technically: UTXO) on the network, instead of simply just multiplying the circulating supply by the exchange rate.

The magnitude of the move in realized capitalization shows just how much capital flowed into the network year to date, as coins aggressively changed hands with a new class of investors from Wall Street beginning to dabble in the monetary asset.

Bitcoin: Realized Capitalization 

Among the most bullish developments since the start of the new year is that realized price has meaningfully outpaced the market price, with realized price increasing 127% while spot price has increased *only* 57%.

Bitcoin: MVRV Ratio 

This has caused the MVRV ratio to decline from 3.14 at the start of the year to 2.22 today. Investors can think of MVRV as a multiple over “fair value,” which means that in a relative manner bitcoin is cheaper today at $45,500 than it was at $29,000 at the beginning of the year.

It should also be noted that price very rarely falls below realized price (currently at $20,900), and those who attempt to wait for this event to occur very well might miss exponential gains.

Below are the times throughout the history of bitcoin where the price traded below the realized price.

AKA: Firesale.

Bitcoin: MVRV Ratio