Bitcoin (BTC) is trading just shy of its all-time high, but the amount of money invested in the asset has already returned to its historic peak, according to on-chain data.
Bitcoin’s “realized capitalization” has surged to $467.2 billion—just $500 million (0.22%) away from its April 2022 high of $468.3 billion, crypto analytics firm Glassnode reported on Twitter.
“Realized capitalization” or “realized cap” measures the total value of all Bitcoin put together based on the time and price at which each individual coin last moved, Glassnode’s website explains. This differs from “market capitalization” or “market cap,” which shows the total value of all Bitcoin based on the asset’s current market price.
“This means the true liquidity-adjusted capital invested, saved, and stored in BTC is now at new highs,” lead Glassnode analyst James Check posted on Twitter on Wednesday.
Analysts consider Bitcoin’s realized cap an estimate of Bitcoin’s cost basis for the average network participant. Therefore, when compared to Bitcoin’s market cap through the market value to realized value (MVRV) ratio, it’s simple to determine whether the average BTC buyer is in profit or loss.
As of Monday, Glassnode’s latest newsletter showed that Bitcoin’s current MVRV value was at 2.14, meaning the average investor now sits on unrealized profits of 114%, more than doubling their money.
Recent data from IntoTheBlock corroborates this, showing an MVRV ratio of 2.22, with 97% of Bitcoin investors in some degree of profit.
Bitcoin soared to over $63,500 on Wednesday and trades for $60,372 at time of writing. The only other times Bitcoin has traded higher were during April 2021 and November 2021, both all-time highs for BTC—after which the price experienced precipitous drops.
That said, both Glassnode and IntoTheBlock agree that BTC has a lot of room to grow before reaching its next cyclical top.
”While it historically signaled a top when MVRV was close to 4, the number has declined every cycle,” wrote IntoTheBlock on Twitter on Tuesday.
The firm also suggested that retail participation in Bitcoin is still dormant, based on a relatively stable number of new network addresses.
On the other hand, Bloomberg ETF analyst Eric Balchunas claims retail participation may be heating up through the newly launched Bitcoin ETFs, which experienced many small individual trades on Tuesday.
“This is before they have options and/or are available on many advisory platforms,” wrote Balchunas on Wednesday. “Definitely a big retail component given size of trades.”