Bitcoin Sets New All-Time High For “Active Money”

Bitcoin has just set a new all-time-high (ATH) record for realized market cap or “active money.” This means BTC holds more capital today than it did during the April price peak.

Bitcoin Realized Cap Has Broken The ATH Record

As per a report from Arcane Research, Bitcoin has just set a new record for “active money” in the network. What is this “active money” or “realized market cap”? Well, to understand the concept, it’s worth taking a look at the normal market cap indicator first.

The market cap of BTC (or any other asset) is calculated by taking the total amount of coins in the network and multiplying it with the current price.

The realized market cap, on the other hand, doesn’t use all the available circulating supply for calculation. Rather, this indicator measures the total “active money” in the Bitcoin network.

All the capital that hasn’t moved for an extended period of time is considered dormant or “inactive money.” All the remaining coins that have moved hands recently are the “active money.”

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Now, where this metric differs from the usual market cap is that it doesn’t use the current price. Instead, it uses the same price of the coins as it was when they last moved.

Here is how the chart of this indicator looks like for Bitcoin right now:

The BTC realized market cap makes new ATH | Source: Arcane Research 

As the above graph shows, BTC’s new realized market cap is about $379 billion. This value is more than it was during the April 2020 ATH. This means that today Bitcoin holds more capital than it did when the price was $64k.

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What this metric helps determine is whether the crypto is overvalued or not. A high value, like right now, suggests that the market accepts current prices. This could mean there is a strong fundamental build-up for the coin.

BTC Price

At the time of writing, Bitcoin’s price floats around $45.7k, up 2% in the last 7 days. Over the last 30 days, the cryptocurrency has accumulated 45% in gains.

The below chart helps depict the trends in the value of BTC over the past three months:

Is BTC starting a downwards trend? | Source: BTCUSD on TradingView

After a long streak of uptrend, Bitcoin had finally started to slow down as the coin stalled around the $46k mark. However, now the crypto seems to be starting on a downwards trend.

It’s unclear at the moment if this downtrend is only momentary or start of a bearish period. Though, if the realized market cap is anything to go by, the market seems to be acceptable of current prices, which should be bullish in the long term.