 |
One way to get out of the debt spiral would be to print more money to pay off the debt. That would then lead to a devaluing/weakening of the US dollar and an inflationary environment, which would lead to more Americans looking to protect their wealth and beat inflation, which plays right into the core tenets of Bitcoin.
We’ll see how this plays out, but the dollar can’t continue to strengthen for long, given the mounting debt this country has to service. When the dollar eventually weakens, and monetary conditions loosen, bitcoin holders should benefit immensely.
 |
Market cap is self-explanatory. You can go to any source that tracks current crypto prices, and they will have the current market value for every project. Here is coinmarketcap. Realized value, or cap, is essentially the price of bitcoin the last time it was sent from one address to another.
The metric is important because it shows how much bitcoin is in profit and makes it a little easier to anticipate corrections. For example, near the peak of a bull run, more than 99% of addresses will be in profit. This would be the result of bitcoin reaching new all-time highs. As prices during the bull run rise rapidly, the market value rises faster than the realized value, and MVRV increases. Generally, we have seen MV/RV reach a peak before the bitcoin price peaks. Most bitcoin belongs to long-term holders and because the price tends to rise dramatically in a relatively short period, the realized price is much lower than the current market price. Take a look at the chart below.
 |
Going forward, we think an MVRV of around 3.5 indicates a frothy market and a possible peak in the cycle. Remember, taking profits means trimming your position in anticipation of a drawdown. You should always hold Bitcoin long-term. Do not sell all of your holdings trying to time these moves. Over the long run, you will destroy more value than you create.
 |
