Bitcoin (BTC) is expected to more than double in value by 2024. However, investors who purchased BTC last year have already seen an average of 40% unrealized gains based on the “realized price” metric.
The realized price is calculated by taking the average value of all Bitcoin at the last price it moved on the chain. Since its inception in 2009, the historical realized price of BTC has been around $41,000. However, for coins bought in 2024, that figure reached $65,901 by the end of the year. With Bitcoin’s market price closing at approximately $93,000 on December 31, buyers from last year were sitting on a significant amount of unrealized profit on average.
The realized price serves as a benchmark for understanding the cost basis and overall profit or loss of individual Bitcoin participants. In order for buyers in 2024 to break even, Bitcoin would need to fall by approximately 31%. This metric has gained importance due to the launch of spot-listed Bitcoin exchange-traded funds (ETFs) in the United States on January 11, 2024, and is closely aligned with the beginning-of-year cost basis for many investors.
Historically, when the Bitcoin price drops below the realized price, it often signals local market bottoms. This has been observed multiple times in January 2024, shortly after the ETF launch, and again in the middle of the year. Therefore, the realized price is considered a critical indicator for investors.
As the year 2025 begins, the average cost basis for Bitcoin buyers has risen to around $95,500.
*This information should not be considered as investment advice.
