Bitcoin has reached a significant milestone, with its realized capitalization exceeding $850 billion for the first time, according to crypto analytics firm Glassnode. This marks a substantial recovery from the 2022 crypto bear market, where the realized cap was around $400 billion.
Since the low point in November 2022, Bitcoin has attracted nearly $500 billion in capital inflows, more than doubling its realized cap. This surge indicates that Bitcoin is storing more value than ever before.
While Bitcoin's daily settlement volume has remained steady at around $9 billion, and the network has settled over $3 trillion in total, this bull market exhibits some notable differences from previous cycles. The wealth held in coins that last moved three months ago is lower than in past cycles, suggesting that demand is not flowing continuously and steadily, but rather in bursts.
Moreover, retail investor participation is less pronounced compared to previous cycles. Instead, larger entities seem to be driving the current demand, indicating a shift toward institutional involvement. This lack of retail euphoria further supports the view that the current cycle is atypical compared to earlier cycles, where retail investors drove much of the price growth.
The shift in investor behavior, combined with bursts of demand and the absence of a sustained retail-driven rally, suggests that this cycle could last longer than previous ones. Some analysts predict this bull market could continue beyond March 2025 due to its atypical nature.
Bitcoin's rising realized cap and the increase in institutional involvement indicate that the cryptocurrency's position as a store of value is strengthening. Despite challenges and fluctuating demand patterns, its ability to absorb significant capital and maintain high levels of economic activity further cements its role in the financial landscape.