Definition ∞ Realized Market Cap is a specialized metric in cryptocurrency analysis that values each unit of a digital asset at the price it was last transacted on its respective blockchain. Unlike standard market capitalization, which uses the current price, this metric provides a more precise estimation of the aggregate capital invested into an asset, effectively filtering out dormant or lost coins. It serves as an indicator of the collective cost basis of all coins in circulation. This metric assists in understanding market cycles and investor sentiment.
Context ∞ News and on-chain analytics platforms frequently cite Realized Market Cap to assess the underlying value and investor behavior in major cryptocurrencies like Bitcoin and Ethereum. Analysts use this metric to identify periods of market capitulation or accumulation, as deviations from the actual market price can signal undervaluation or overvaluation. The discussion often centers on its utility as a macro indicator for market health and long-term price trends. Future applications will likely extend its use to more digital assets and integrate it into predictive models for market forecasting.
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