Bitcoin’s Realized Market Capitalization Reaches Peak

Bitcoin’s realized market capitalization reached a record level of $378 billion last week, according to data from blockchain company Glassnode.

Realized market capitalization measures the size of the active market capitalization of bitcoin. This measurement ignores bitcoin supplies that have not changed owners for a long time, such as the wealth of bitcoin creator Satoshi Nakamoto, whales, lost coins, or long-term holders.

To calculate realized market capitalization, data metric platforms like Glassnode assign time-sensitive values to coins. If a coin was last moved in 2018, when the price of bitcoin was $6,000, that coin is valued at $6,000, not at today’s price.

Standard market capitalization measurement refers to multiplying all coins in circulation by the current market price. The total market capitalization of bitcoin is $870 billion, according to CoinGecko.

Realized market capitalization provides a clearer estimate of the size of the ‘active’ bitcoin market. The fact that bitcoin reached its highest realized market capitalization while the price is still far from the peak of $64,800 suggests that there has never been so much ‘active’ money in the market.. 

The increase in realized market capitalization coincides with bitcoin reaching $48,000, which is its highest price since the market downturn that began in mid-May. Bitcoin rose by 9.5% last week and by 42.5% this month. Shortly after reaching $48,000, bitcoin fell to $46,700.

Another sign of turbulence is the latest adjustment in bitcoin mining difficulty. In its latest bi-weekly change, the bitcoin network on August 13 made mining 7.3% more difficult, indicating increased competition among miners.

This adjustment was the second consecutive positive change after two months of decline. The declines followed the Chinese crackdown, which was also partially responsible for halving the price. Bitcoin’s record realized market capitalization shows that traders are beginning to pay more attention and actively participate in the market.

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