In brief

  • Bitcoin's "realized price" just hit a new high of $6,000.
  • At the same time, Bitcoin's supply continues to find its way to smaller wallets.
  • Both trends come at a time when Bitcoin's market price is heading toward $12,000.

The "realized price" of Bitcoin just hit an all-time high, coinciding with its circulating supply being bought up by smaller account holders now more than ever before. 

Per data from crypto analytics firm Glassnode, Bitcoin’s realized price has never been greater, today hitting a new milestone of $6,000 per coin.

Realized price (as opposed to the current market price of roughly $11,800) is derived from realized capitalization, a metric invented by crypto data firm Coin Metrics in December 2018 that is used to measure the aggregate value of the Bitcoin network by multiplying each Bitcoin by the last time it moved. (Among other things, this is meant to account for lost coins now out of circulation.)

This is different from market capitalization, which is derived by multiplying each Bitcoin by the current price. Realized price, in turn, is calculated by dividing the realized cap by the circulating supply. Bitcoin hitting a fresh all-time high realized price (i.e. the average entry price for investors) could be a sign that investors are now getting in at higher prices.

At the same time, an increasing percentage of Bitcoin’s supply is being allocated to smaller-account wallets. In other words, the supply of Bitcoin is becoming more evenly distributed among its holders, as opposed to just a few investors holding large amounts, signaling stronger demand from retail (mom and pop) investors.

Nearly 14% of Bitcoin’s supply is held in wallets with 10 or fewer total Bitcoin (about $110,000 worth, at today’s prices), up from just 5% from five years ago, according to data from Glassnode. Of those accounts, wallets holding between 0.1 and 1 Bitcoin (roughly $1,000 to $11,000 worth) account for 3.6% of the circulating supply, and wallets holding 0.1 or less only account for 1%. 

By comparison, accounts with 10 to 100,000 ($110,000 to $1.1 billion) Bitcoin have steadily decreased since Bitcoin’s inception. The share of supply among entities holding 10k-100k Bitcoin has declined the most dramatically in the past 5 years, falling from 19% to 12%. Wallets with 1,000 to 10,000 BTC have only shed 2% of their share, going from 24% to 22% over the same period (entities holding 100 to 1,000 BTC fell by a similar margin).

Interestingly, wallets with more than 100,000 Bitcoin have grown over the past five years, occupying nearly 13% of the supply from 8% five years prior. The majority of the growth came after the 2017 bubble, and is likely indicative of exchange reserves.

Per Longhash data, Coinbase, for instance, owns nearly 1 million Bitcoin in one wallet, while Huobi, Binance, and Bitfinex have wallets exceeding 200,000 Bitcoin. 

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.