MVRV, Market Value to Realized Value, in its basic form divides market capitalization by Realized Cap in the same currency unit and with corresponding scope and time. The result is dimensionless. A denominator based on last on-chain movement prices is a methodological estimate; it does not guarantee knowledge of actual purchase prices or future returns.
Coin Metrics calculates basic MVRV as market capitalization divided by Realized Cap and describes the result as dimensionless. Our check requires a common currency, time and clearly defined input scope, plus a positive denominator. Reversing the division produces a different indicator; a number without methodology is insufficient for comparison. [1]
In its Bitcoin On-Chain Indicators Primer, Coin Metrics explains that last on-chain movements need not be trades and Realized Cap does not directly measure money invested. Our interpretation therefore retains this uncertainty in MVRV. An output’s last reference price is neither a verified purchase by its current owner nor a tax acquisition cost. [3]
Glassnode bases MVRV on comparing market and realized valuations. From this definition, with a positive denominator, we infer that a value above one means a higher market total, below one a lower total, and one equal totals. This does not mean the same outcome for every output, address or person, nor is it the share of profitable holders. [2]
Coin Metrics derives market capitalization from price and current supply, while basic MVRV divides that value by Realized Cap. With the same positive supply, our algebra allows the ratio to be written as market price divided by Realized Price. Mixing scopes, different times or incompatible adjustments does not justify this shortcut. [1]
For Free Float MVRV, Coin Metrics replaces the numerator with free-float capitalization and retains the Realized Cap of current supply. For MVRV Z-Score, Glassnode divides the difference between market and realized capitalization by the standard deviation of market capitalization. Our comparison does not equate these constructions with the basic ratio or transfer thresholds between them without checking definitions. [1] [4]
Glassnode describes changes in Realized Cap when spent outputs are revalued. In our unadjusted interpretation, MVRV therefore depends on more than a new market price: the denominator can change too. Transfers between one’s own wallets can have an effect without an actual sale; any entity adjustments must be documented by methodology, not inferred from the name. [5]
Glassnode describes delayed data, price revisions, and changes in clustering and methods. Our reproduction therefore records the provider, frequency, scope, versions of both valuations and when they became available. Using a retrospectively recalculated series in a historical test without this check can introduce future information into decisions. [6]
In the introduction to its primer, Coin Metrics cautions that past indicator success does not guarantee future results and colored zones are based on history. Our use of MVRV therefore treats neither a low value as an instruction to buy nor a high value as a certain top. The ratio alone determines neither timing, probability nor net return after costs. [3]
The same denominator and three alternative market prices
For the clearest picture, read this entry together with Realized Cap, Realized Price, Market capitalization, On-chain Analysis, NUPL. The reverse links also lead from Market capitalization, Realized Cap, Realized Price, SOPR.
01Does MVRV below one mean a certain buying opportunity?+
No. It means a lower market valuation than realized valuation under the given input definitions. Price can fall further and the denominator can change. Historical similarity alone determines neither future return, reversal timing nor the suitability of a trade for a particular person.
02Are MVRV and MVRV Z-Score interchangeable?+
No. Basic MVRV divides two capitalizations, whereas Z-Score compares their difference with the standard deviation of market capitalization. Their calculations and interpretations differ; a numerical threshold for one cannot simply be applied to the other.