Market Capitalization

What this measures

Market capitalization multiplies the number of bitcoin issued by the day’s price. The result, shown here in trillions of dollars ($T), is the theoretical value of all existing bitcoin. The data comes from Coin Metrics. The term is borrowed from the stock market, but Bitcoin has no shares and no earnings: it is a price multiplied by a quantity.

A theoretical value, not money invested

Market cap applies the price of the latest trade to every bitcoin, including coins that have not moved in years. It therefore does not tell you how much money has flowed into Bitcoin, let alone how much could flow out: if a large share of holders tried to sell at once, the price would fall sharply long before everything was sold. Coin Metrics popularized an alternative measure, realized capitalization, which values each coin at the price on the day it last moved.

It also counts bitcoin that no one will ever spend again. Misplaced keys, discarded hard drives, heirs without a recovery phrase: chain analysis firms such as Chainalysis put these losses at several million bitcoin, without being able to identify them. On top of that come the coins mined in 2009 and 2010 attributed to Satoshi Nakamoto, often estimated at around one million, most of which have never moved.

Because supply grows slowly and on a known schedule, the curve tracks the bitcoin price almost exactly. Only circulating supply sets the two apart, and its effect shrinks with every halving.

Value grows, keys concentrate

Market cap gives a sense of scale: it is the yardstick used to compare Bitcoin with gold or large listed companies. It does not, however, tell you how many people use Bitcoin, or how many hold their own coins. Since January 2024, a significant share of demand has gone through US spot ETFs, whose bitcoin is held by a handful of custodians. Buyers there own exposure to the price, not bitcoin they could withdraw to their own wallet.

🪙 What will happen if Bitcoin fails to become a currency?

The history of the curve is also a reminder of how fragile that value is. In 2022, the year of the Terra collapse and then FTX, market cap lost more than half its value without a single bitcoin disappearing.

A record market cap can therefore coexist with a network where fewer and fewer holders control their own keys. This chart measures what Bitcoin is worth, not who really owns it.