What is realized capitalization?

Realized capitalization is a metric used in the cryptocurrency market, particularly for measuring Bitcoin's value. It evaluates the value of each Bitcoin based on the last time it was traded or settled on-chain. Essentially, it's a liquidity-adjusted market cap that can be seen as the aggregate cost basis of all the holders. This metric offers a more accurate picture of market value compared to traditional market capitalization.

Nic Carter, a prominent figure in the crypto space, explains that realized capitalization is much higher than the 2017 peaks, indicating that more wealth is stored in Bitcoin now than ever before. It reflects sustained economic activity at higher price levels over a more extended period. This metric also helps in understanding the market cycle and identifying potential points for profit-taking based on the ratio of market cap to realized cap 1.