Realized Cap

Realized cap is a market capitalization metric that values each UTXO (unspent transaction output) based on the price when it was last moved as opposed to its current value. As such, it represents the realized value of all the coins in the network, as opposed to their market value.

To calculate the realized cap, you first need to find the total number of UTXOs in circulation. Then, you need to find the price at which each UTXO was last moved. Finally, you need to multiply the number of UTXOs by the price of each UTXO to get the realized cap.

Realized cap is a useful metric for understanding the true value of a cryptocurrency. It is not affected by lost or dormant coins, which can distort the market capitalization. Realized cap can also be used to identify overbought or oversold markets.

Here is the formula for calculating the realized cap:

Realized Cap = Sum(UTXO * Price)

Where:

• UTXO is an unspent transaction output
• Price is the price at which the UTXO was last moved

Here is an example of how to calculate the realized cap:

Let’s say there are 100 UTXOs in circulation, and the price at which each UTXO was last moved is $10. The realized cap would be:

Realized Cap = 100 * $10 = $1,000

Realized cap is a more accurate measure of the value of a cryptocurrency than market capitalization. However, it is important to note that the realized cap is still a lagging indicator. It takes time for the realized cap to reflect changes in the market price.

Pros:

• It is not affected by lost or dormant coins.
• It can be used to identify overbought or oversold markets.
• It is a more accurate measure of the value of a cryptocurrency than market capitalization.

Cons:

• It is a lagging indicator.
• It can be difficult to calculate.
• It is not available for all cryptocurrencies.

Overall, realized cap is a useful metric for understanding the true value of a cryptocurrency. However, it is important to be aware of its limitations before using it.