Definition. The RVT Ratio is calculated as the ratio between the Realized Cap (USD) and on-chain transaction value (USD), with a 28-day average applied. As such it represents the inverse of monetary velocity relative to the aggregate market realized cost basis. This version makes use of entity-adjusted on-chain volume, which filters out transfers between addresses of the same entity. The ratio is shown in pink alongside Market Cap (grey) and Realized Cap (orange).

Technical. RVT Ratio (Entity-Adjusted) = sma(Realized Cap / Entity-Adjusted Transfer Volume (USD), 28). Entity-adjustment removes internal self-transfers (e.g. exchange wallet shuffles, change outputs between own addresses), leaving an estimate of the economically meaningful transfer volume only.

Interpretation.

• High values and uptrends in RVT indicate that transaction volumes are declining relative to the realized cap, indicating a potential slow-down in network utilisation.

• Low values and downtrends in RVT indicate rising transaction volumes relative to the realized cap, indicating an increase in network utilisation.

• Stable sideways values of RVT indicate that transaction volumes are changing at an equivalent rate to the realized cap, indicating the current trend is likely sustainable and in equilibrium.

Because non-economic volume can be substantial and varies with wallet management practices, the entity-adjusted variant gives a cleaner read of true economic throughput than the raw version, at the cost of relying on Glassnode's entity clustering heuristics.

Notes. Coined by Checkmate and David Puell — The Bitcoin RVT Ratio, A High Conviction Macro Indicator, 22-Sept-2019. Built from Realized Cap and Entity-Adjusted Transfer Volume. See also the unadjusted RVT Ratio and the Entity-Adjusted Coinday NVT and RVT Ratio.