Outflows Persist, L2s Shine
Realized Cap Highlights Continued Outflows
Realized capitalization is an important metric we have frequently referenced in prior notes. It values the network based on the price at which each bitcoin was last exchanged. It is a way to calculate the overall cost basis of all $BTC holders and, consequently, is a useful measure of flows into and out of the bitcoin network.
As one might expect, this year has witnessed significant and sustained declines in realized cap as entities that bought towards the market top of the market in 2021 have sold their BTC at a loss, seeking liquidity in other assets. Below we include the 30-day average of the realized P&L metric, which calculates the aggregate gain/loss on bitcoin transactions. When realized P&L moves below zero, we can see that realized cap heads lower.
Below is a more explicit graphical representation of the same realized cap metric. This chart articulates the same observed outflow trend differently – mapping out inflows/outflows on a weekly basis. Understandably, there have been sustained outflows since Q2 of this year.
A couple of things to note on the chart above:
Naturally, most cycles are comprised of a period of outsized inflows followed by outflows. However, using the 2017 b...Reports you may have missed
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