The price of bitcoin (BTC) may have more than doubled in the past year, but investors who bought the largest cryptocurrency during 2024 saw, on average, just a fraction of that figure, according to a measure known as realized price.
The realized price is the average value of all bitcoins calculated at the price at which the tokens were last moved on the chain. While that value is around $41,000 for BTC since its creation in 2009, for coins purchased last year it was around $65,901 as of December 31. With the market price closing around $93,000, 2024 buyers, on average, were looking for unrealized gains of around 40%.
Monitoring realized price is important to understand the overall cost and profit base of individual participants. It means that bitcoin would have to fall by around 31% for last year’s investors to return to equilibrium price levels. Spot-traded exchange-traded funds (ETFs) in the US debuted on January 11., close enough to the beginning of the year that it is a good approximation of your cost base.
There is another reason to monitor the level. When the price of bitcoin fell below the realized price in 2024, it tended to mark a local bottom in the price of bitcoin. This happened once in January, after the ETFs launched, and several times in the middle of the year. Monitoring the cost base of the 2024 cohort would have been a profitable business strategy.
As we enter 2025, the average cost basis is around $95,500, which puts the buyer with a slight gain entering the year. At press time, bitcoin is trading at over $96,000.
Furthermore, historically, the realized price offers a great level of support for bitcoin in bear markets and rarely trades below it.
