Ethereum’s realized capitalization has increased by nearly 50% in January so far to tag new all-time highs above $70 billion, according to CoinMetrics.
The data shows that Ethereum’s realized cap has more than tripled since dropping below $25 billion in during March 2020’s “Black Thursday” crash..
The realized capitalization metric calculates the value of a crypto asset’s supply according to when each unit last moved on-chain. The indicator seeks to estimate the price actually paid for each ETH in circulation — rather than simply multiply the current price by the total supply as market cap does. However, realized cap cannot account for coins that are only traded on centralized exchanges and do not move on-chain.
The indicator is designed to offer a way to compensate for lost or unclaimed coins by ignoring their appreciation from the time each unit was last transferred on-chain.
By ignoring the fluctuating capitalization of dormant coins, realized cap offers a signal for when new capital is flowing into a given market, with CoinMetrics inferring that many new investors may have been buying the bags of seasoned ETH whales during January’s bull market.
The report also noted a 5% spike in the number of Ethereum addresses holding more than 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.”
The growth of Ethereum’s realized cap appears to have outperformed that of Bitcoin's last year, with Glassnode reporting that BTC’s realized cap had grown 50% since the beginning of 2020 as of Dec. 15. CoinMetrics’ data indicates Ethereum had seen an 85% increase over the same period.
The index notes Ethereum has already surpassed Bitcoin by transaction fees and transaction count, and estimates that transaction volume and node count are at 99% and 97% of Bitcoin’s respectively.