Bitcoin Buyers Enjoyed 40% Average Gain Last Year: Realized Price Insights
The average realized price of 2024 buyers in bitcoin was $65,901. The bitcoin (BTC) price may have more than doubled last year, but investors who bought the largest cryptocurrency during 2024 saw, on average, only a fraction of that according to a measure known as the realized price. The realized price is the average value of all bitcoin calculated at the price at which the tokens last moved on-chain. While that value is around $41,000 for BTC since its inception in 2009, for coins bought last year it was around $65,901 by Dec. 31. With the market price closing around $93,000, 2024’s buyers were, on average, looking at unrealized profit of around 40%. Monitoring the realized price is important to understanding individual participants’ overall profit or loss and cost basis. It means bitcoin would have to slump some 31% for last year’s investors to return to break-even price levels. The U.S. spot-listed exchange-traded funds (ETFs) debuted on Jan. 11, close enough to the start of the year that this is a good approximation of their cost basis. There’s another reason to monitor the level. When the bitcoin price dropped below the 2024 realized price, it has tended to mark a local bottom in bitcoin price. That occurred once in January, after the launch of the ETFs, and several times in the middle of the year. Monitoring the cost basis of the 2024 cohort would have been a profitable trading strategy. As we enter 2025, the average cost basis is around $95,500, which puts the buyer at a slight profit as we start the year. As of press time, bitcoin is trading at over $96,000. In addition, historically, the realized price offers a great support level for bitcoin in bear markets and rarely trades below it.
### Insights from Senior Analyst James Van Straten
James Van Straten, the senior analyst at CoinDesk, specializing in Bitcoin and the macro environment, shed some light on the significance of the realized price. Previously working as a research analyst at Saidler & Co., a Swiss hedge fund, he introduced on-chain analytics to his expertise. James specializes in daily monitoring of ETFs, spot, futures volumes, and flows to understand how Bitcoin interacts within the financial system. He holds more than $1,000 worth of bitcoin, MicroStrategy (MSTR), and Semler Scientific (SMLR).
Bitcoin investors can take valuable cues from the realized price to navigate the market effectively. As the new year unfolds, keeping a close eye on the realized price can provide insights into potential trading strategies and market trends. With Bitcoin trading at over $96,000, understanding the realized price dynamics can help investors make informed decisions to maximize their profits and minimize risks.
By leveraging the expertise of analysts like James Van Straten and staying informed about key indicators such as the realized price, investors can position themselves strategically in the ever-evolving cryptocurrency market. The journey of Bitcoin buyers in 2024 highlights the importance of staying attuned to such crucial metrics for long-term investment success.