MVRV Ratio

The MVRV ratio captures the relationship between the perceived market valuation and the actual realized cost basis of the asset. Building upon prior observations that Market Capitalization frequently overstates the true value of Bitcoin, and that Realized Value provides a more accurate measure of this valuation, we can leverage their ratio to determine whether the asset is currently overvalued or undervalued by the market.

Following Mahmudov and Puell [6] , the MVRV is calculated as the ratio of Market Capitalization to Realized Value:MVRV = Market Capitalization / Realized Value