This is based on a model that measures the difference between the wealth held by the coin’s long-term and short-term investors and the pattern of coin rotation between both cohorts of investors.According to Glassnode, Bitcoin’s market capitalization has historically surpassed its realized capitalization. However, this might not be the case during severe bear markets like the latter half of 2022, where BTC’s market capitalization fell below its realized capitalization.
When the BTC market is in an uptrend, coins long-held by long-term investors are transferred to newer investors due to the influx of fresh demand. Conversely, during periods of downtrend, “paper hands” and speculators transfer coins to longer-term holders.“The market has reached an equilibrium between these two investor groups, with a slightly positive inflow of newer investors entering the market .
According to Glassnode, BTC’s long-term investors hold more than 15% of the coin’s total capital during bear market cycles.As for short-term investors who have held their coins for less than 30 days, their activity is closely related to market demand. It increases during uptrends and decreases during bear markets.