Bitcoin’s Realized Cap Reflects Strong Capital Inflows Into BTC Market

According to Glassnode, a leading on-chain, and financial metrics platform, the Bitcoin realized cap is 5.4% shy of its previous all-time high (ATH) of $467 billion. The analytics platform also observed that the flagship crypto is experiencing strong capital inflows.

The #Bitcoin Realized Cap remains just -5.4% shy of its previous ATH of $467B, and is currently experiencing strong capital inflows.

That said, the duration for this recovery to accelerate has been markedly slower than prior cycles, arguably due to the significant supply… pic.twitter.com/UfPdDiN6AG

— glassnode (@glassnode) February 1, 2024

In a recent post on X, Glassnode explained that the duration for this recovery by Bitcoin to accelerate has been markedly slower than prior cycles. The platform suggested that this could be attributed to the significant supply overhang from challenging trades like the Grayscale GBTC arbitrage.

Glassnode’s historical data shows that the rate of Bitcoin’s realized cap for the 2012-13 market cycle was 0.22% per day, the cap for the 2015-16 cycle was 0.09% per day, and in the 2019-20 cycle, the rate rose to 0.17% per day. More recently, during the 2023-24 market cycle, Bitcoin’s realized cap rate has dropped further to 0.05% daily.

It is essential to note that the realized cap for Bitcoin provides a snapshot of the cryptocurrency’s actual value, accounting for the price at which each Bitcoin was last transacted. Unlike the regular Bitcoin market capitalization, the realized cap factors in the movement of Bitcoins over time, discounting those that have remained stagnant.

Glassnode’s post contains a chart showing that Bitcoin’s realized cap tends to be making a steep recovery to the upside. Such a trend suggests that the flagship crypto is in a bull market, according to information from Glassnode’s website.

Image courtesy: Glassnode

Bitcoin traded for $43,133 at the time of writing, bouncing off a recent low of $38,505, according to data from TradingView. The pioneer cryptocurrency continues to trade above the significant $40,000, as users expect BTC to push higher ahead of the upcoming Bitcoin halving.

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