This metric presents monetary velocity corrected using the principles of Cointime Economics. We apply cointime-adjustment to Bitcoin’s monetary velocity by substituting total circulating supply for active supply in the denominator of its calculation. This acts to account for the relative scale of economic volume throughput relative to the economically active proportion of the supply.

It can be seen that cointime-adjustment signals a higher monetary velocity than the nominal case. Intuitively, this makes sense, as lost coins are effectively discounted from this model, thus indicating that observed transfer volumes are larger relative to the non-lost monetary base, and suggesting that the actual churn of coins in the network is larger than previously estimated.

• 🟣 Nominal Velocity is measured as the annualized transaction volume divided by Circulating Supply.

• 🔴 Cointime-Adjusted inflation rate is measured as the annualized transaction volume divided by Active Supply.

Coined By

This metric was developed within the Cointime Economics framework for Bitcoin. This project was a joint venture between Glassnode and ARK Invest, with full details available in two formats: an overview primer (Version I published via ARK) and a comprehensive guide for specialists (Version II published via Glassnode).