Investor_Cap

Tech spec

Brief Description: Represents the investor-driven component of Bitcoin’s Realized Cap.

Investor_Cap is a component of the Realized Cap in Bitcoin on-chain analysis. It is defined as part of the sum that makes up the Realized Cap, alongside the Thermocap. Over time, the Investor_Cap has become a dominant factor influencing the Realized Cap, reflecting the significant role of investor activity in determining Bitcoin's value. It is based on the Cointime Economic framework.

Interpretation Investor_Cap is crucial for understanding the impact of investor behavior on Bitcoin’s market dynamics. A growing Investor_Cap suggests increasing investor activity and influence over Bitcoin's market value. It reflects not just the trading and transactional activities but also the broader market sentiment among investors. This metric is especially useful for analyzing the depth and maturity of the Bitcoin market, as it shifts from being predominantly miner-driven to investor-driven.

Advanced Explanation The Investor_Cap represents the contribution of transactions and trade by coin holders and investors, including investor-dependent entities like exchanges, to the valuation of Bitcoin’s Realized Cap. Initially, the Thermocap, which represents the cumulative value of all bitcoins at the price they were mined, dominated the Realized Cap. However, the contribution of the Thermocap has steadily declined, making the Investor_Cap more prominent in Bitcoin's valuation.

Investor_Cap = The sum of the realized value of all transactions considering all blocks, except miner coinbase transactions

Cointime Economics is a new framework for Bitcoin onchain analysis published by James Check and David Puell. References: https://ark-invest.com/white-papers/cointime-economics/ and https://insights.glassnode.com/introducing-cointime-economics/