What Is Realized Cap?
Realized Cap (or Realized Capitalization) values each coin at the price it last moved on-chain, rather than at the current market price. If a Bitcoin was last transacted at $30,000, it contributes $30,000 to the Realized Cap regardless of whether BTC currently trades at $50,000 or $20,000. It represents the aggregate cost basis of all coins.
How Realized Cap Works
Realized Cap is always more stable than market cap because it filters out the speculative premium (or discount) baked into the current price. It increases when coins are moved at prices higher than their previous movement (new money entering) and decreases when coins move at lower prices (capitulation). The rate of Realized Cap growth measures genuine capital inflow.
Why It Matters for Traders
The MVRV Ratio (Market Value / Realized Value) is derived from Realized Cap and is one of the most reliable cycle indicators. When market cap is far above realized cap (MVRV > 3), holders are in extreme profit and likely to distribute. When market cap falls near or below realized cap (MVRV < 1), the market is capitulating and historically at a cyclical bottom.