Bitcoin: Assessing whether a surge in capital inflows influenced BTC price

• BTC realized cap was close to 400 billion as inflow increased.
• BTC NRPL showed profit as BTC traded above $30,000.

The value of Bitcoin has surged, attracting a growing interest in acquiring it, as evident from the influx of capital it has received. Considering the substantial inflow of BTC, what is the current profitability or potential loss status?

Read Bitcoin (BTC) Price prediction 2023-24

Bitcoin realized cap shows a consistent inflow

Glassnode recently shared a post revealing that Bitcoin has been experiencing a notable influx of capital as more users flocked to acquire this digital asset. As of this writing, the Realized Cap has surpassed a staggering $394 billion, indicating a consistent flow of capital into Bitcoin throughout 2023.

This upward trend in the Realized Cap suggests that coins are changing hands at higher prices overall, which implies a modest increase in new demand for Bitcoin this year.

Source: Glassnode

It’s worth noting that during bear markets, Bitcoin typically witnesses significant capital outflows as investors attempt to mitigate their losses. However, the current scenario portrays a different picture, with capital flowing into the asset.

The Realized Cap, one of the oldest and most widely observed on-chain metrics, is a powerful tool for evaluating the genuine capital inflows into Bitcoin. Given the amplified capital flow, it prompts us to consider the profitability of this asset.

Analyzing Bitcoin’s net profit/loss

In 2023, the Net Realized Profit/Loss (NRPL) was predominantly profit-driven, witnessing a daily net inflow averaging around $270 million (profits minus losses). This sustained profit regime marks the first of its kind since April 2022. The magnitude of this inflow is comparable to the periods observed in the first half of 2019 and late 2020.

Source: Glassnode

By examining the ratio between total realized profit and loss, we can gauge the year’s overall performance. Thus far, 2023 has been a positive year, surpassing the breakeven level of 1.0 early in January. As of this writing, the NRPL had exceeded $57.2 million.

A shaky BTC trend

Bitcoin has recently been displaying a precarious trend, hovering around the $30,000 price range over the past few days. Surprisingly, it has successfully held onto this range, showcasing stability. 

Source: TradingView

How many are 1,10,100 BTCs worth today

At the time of writing, its trading price stood at approximately $30,100, indicating a slight uptick following a series of downward trends.

Despite the fluctuations, Bitcoin has demonstrated resilience by staying above the neutral zone on the Relative Strength Index (RSI), which suggests that its bullish trend has been maintained.