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MVRV Ratio

In simple terms

The MVRV Ratio compares what Bitcoin is worth right now to what people paid for it on average. If everyone paid $30,000 on average but Bitcoin costs $60,000 today, that's a sign it might be overpriced — like a car that's suddenly worth triple what buyers originally paid.

Definition

Market Value to Realized Value — compares current price to average price paid, helping identify over/undervaluation.

In depth

The MVRV Ratio divides Market Value (current price × circulating supply) by Realized Value (sum of all Bitcoin acquisition costs weighted by when they were last moved on-chain). This metric identifies market cycles by revealing when aggregate investor positions are deeply profitable or underwater. A ratio above 3.7 historically signals local tops, as it indicates most holders are sitting on substantial unrealized gains and may sell; conversely, ratios near 1.0 suggest capitulation where average cost basis approaches spot price, often marking accumulation opportunities.

How does MVRV Ratio work?

MVRV divides market value by realized value. Market value is circulating supply multiplied by the current price. Realized value prices every coin at the market price on the day it last moved on-chain and sums those figures, approximating the aggregate cost basis of the network. Dividing one by the other yields a single number: above 1 means coins are collectively worth more than the price at which they last changed hands, below 1 means the reverse. Readings are interpreted against the same asset's own history. Coins that sit unmoved, including balances held at exchanges, keep a stale cost basis and distort the result.

An example

Illustrative figures: a coin has 20 million units outstanding at $50, giving a market value of $1 billion. Pricing each unit at the market price on the day it last moved on-chain sums to a realized value of $500 million. MVRV is 1,000 divided by 500, or 2.0, meaning the aggregate on-chain cost basis sits at half the current price. That describes accumulated history, not what comes next.

Figures are illustrative only.

What beginners get wrong

  • Treating fixed MVRV levels as tops and bottoms ignores that those thresholds were drawn from a handful of past cycles and have shifted.
  • Moving coins between two wallets you own resets their recorded cost basis, so realized value is an approximation rather than a real purchase record.
  • Balances held inside exchanges trade constantly without any on-chain movement, so their true cost basis never updates in the calculation.
  • Applying MVRV to a young or thinly held asset gives unstable readings, since there is too little history to compare the number against.

Related terms

Part of

What is on-chain analysis, and what can blockchain data show? — the subject page for on-chain analysis, with all 8 of its definitions in one place.

Educational only — not financial advice.