Ethereum realized capitalization is up nearly 50% so far in January to tag new all-time highs more than $ 70 billion according to CoinMetrics.
The data shows that Ethereum’s realized limit has more than tripled since it fell below $ 25 billion in the March 2020 ‘Black Thursday’ crash.
The realized capitalization metric calculates the value of a cryptocurrency’s stock based on when each unit was last moved in the chain. The indicator attempts to estimate the price actually paid for each ETH in circulation – rather than simply multiplying the current price by the total supply, as the market cap does. However, the realized limit cannot take into account coins that are only traded on centralized exchanges and do not move on-chain.
The indicator is designed to provide a way to make up for lost or unclaimed coins by ignoring their valuation from the time each unit was last transferred on-chain.
By ignoring the fluctuating capitalization of dormant coins, the realized cap provides a signal for when new capital is flowing into a particular market, with CoinMetrics concluding that many new investors may have bought the bags of seasoned ETH whales during the January bull market.
The report also noted a 5% spike in the number of Ethereum addresses with over 10,000 Ether, with 1,241 wallets currently holding $ 13.8 million or more in ETH. As such, CoinMetrics concludes that “institutional investors are starting to buy ETH.”
Ethereum’s realized limit growth seems to have outperformed Bitcoin’s last year, with Glassnode report that the realized limit of BTC had increased by 50% since early 2020 from December 15th. CoinMetrics data indicates that Ethereum had seen an 85% increase over the same period.
The index notes that Ethereum has already surpassed Bitcoin by transaction fees and number of transactions, and estimates that the transaction volume and number of nodes are 99% and 97% of Bitcoin’s, respectively.