Vaultedness

Tech spec

Brief Description: The proportion of Bitcoin's capitalization that is 'locked', 'inactive', 'dormant', 'unmoved', or otherwise 'lost'.

Vaultedness is calculated as the ratio between the Vaulted Cap and the Market Cap. This metric has generally decreased over the network's lifetime, indicating changes in how Bitcoin is held and utilized. It is based on the Cointime Economic framework.

Interpretation A decreasing trend in Vaultedness suggests that a smaller proportion of Bitcoin's supply is inactive or lost, potentially indicating increased liquidity and active trading in the market. Conversely, a higher Vaultedness might reflect a trend towards long-term holding or a loss of coins. This metric is important for understanding the distribution of Bitcoin across different types of holders and their impact on market dynamics.

Advanced Explanation Vaultedness quantifies the extent to which Bitcoin's capitalization is not actively participating in the market. This includes coins that are held in long-term storage or have potentially been lost. The metric provides an understanding of the proportion of Bitcoin's supply that is not readily available for transactions or trading.

Vaultedness = ∑CBS / ∑CBC

or

Vaultedness = Vaulted Supply / Circulating Supply

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/