- Bitcoin’s realized capital has recently experienced significant growth and increase, indicating an improvement in the liquidity conditions of the leading digital asset.
- Increasing liquidity becomes apparent in the short-term upward trend where BTC continues to trade above the cost base of short-term investors.
- This increase in Bitcoin’s realized capital is consistent with the increase in Tether (USDT) liquidity, which has supported the bull market throughout history.
What does the recent significant increase in Bitcoin’s realized capital metric indicate? The on-chain firm explains!
Bitcoin’s Realized Capital Metric
Bitcoin’s realized capital has recently experienced significant growth and increase, indicating an improvement in the liquidity conditions of the leading digital asset. According to a report by on-chain market analytics platform CryptoQuant, the increasing realized capital of Bitcoin and the rising market value of stablecoins are indicators of new capital flowing into the crypto market.
Realized capital is a measure that assists in estimating the economic weight or true value of Bitcoin (BTC) by taking into account the price at which each asset last moved or traded.
CryptoQuant determined that Bitcoin’s realized capital has grown the fastest this year and that the inflow of new capital into the market continues. The metric turned positive for the first time since October 2022, affecting BTC’s market value over time as it has. Increasing liquidity becomes apparent in the short-term upward trend where BTC continues to trade above the cost base of short-term investors.
This increase in Bitcoin’s realized capital is consistent with the increase in Tether (USDT) liquidity, which has historically supported bull markets. The crypto analytics platform found that approximately 70% of BTC’s supply has remained inactive for over a year. According to analysts, these findings indicate that the majority of investors have a holding mentality.
Growing Enthusiasm Among Investors
Several other events have recently occurred that positively influenced BTC’s price. One of these is the emergence of Bitcoin supporter Javier Milei as the elected President of Argentina, leading with a 56% vote. In the context of Argentina’s economic instability and rising inflation, Milei advocated for the use of BTC, suggesting resolving the dominant economic situation by replacing the Argentine Peso with USD.
As news of Milei’s victory circulated, BTC, along with the overall crypto market, surpassed $37,000. The value of USDT against the Peso also rose in response to the news. Meanwhile, the BTC Fear and Greed Index indicates that investors are currently in a state of greed, continuing for more than 30 consecutive days for the first time since Q4 2021. Rising greed may be a sign of investors rushing into the market due to FOMO (fear of missing out), indicating a potential correction in BTC’s price.
