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Supply in Profit/Loss

Supply in Profit/Loss measures the percentage of Bitcoin's circulating supply that is currently worth more (in profit) or less (at a loss) than its last on-chain transaction price. It provides a direct gauge of aggregate holder sentiment and market cycle positioning.

Definition

Supply in Profit/Loss measures the percentage of Bitcoin's circulating supply that is currently worth more (in profit) or less (at a loss) than its last on-chain transaction price. It provides a direct gauge of aggregate holder sentiment and market cycle positioning.

Explanation

Every Bitcoin UTXO has a known last-moved price, which serves as a proxy for its acquisition cost. Supply in Profit counts all coins whose last-moved price is below the current market price, while Supply in Loss counts those whose last-moved price is above. Together, they show what fraction of the total supply is underwater versus in the green.

At cycle peaks, supply in profit typically exceeds 95% — nearly everyone is winning, which breeds complacency and euphoria. At cycle bottoms, supply in profit can drop below 50%, meaning the majority of holders are underwater. These extremes have been remarkably consistent across Bitcoin's four major cycles, making the metric a reliable cycle compass.

The rate of change in supply in profit is also informative. A rapid shift from high profit to high loss indicates a sharp correction and potential capitulation. A gradual climb in supply in profit during a recovery suggests a healthy trend. When combined with MVRV or NUPL, supply in profit/loss adds granularity by showing the actual distribution of winners and losers rather than just the average.

Key Takeaways

  • •Tracks the percentage of all Bitcoin supply currently held at a profit or loss.
  • •Above 95% in profit has historically coincided with cycle tops.
  • •Below 50% in profit has marked deep bear markets and generational buying opportunities.
  • •Rate of change reveals whether transitions are capitulative or gradual.

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Frequently Asked Questions

Each UTXO's last-moved price is compared to the current market price. If the current price is higher, those coins are counted as in profit. The total coins in profit divided by circulating supply gives the percentage. This calculation updates continuously as price moves.

When over 90% of supply is in profit, nearly all holders are sitting on gains. While this feels positive, it historically signals elevated risk because there is a large pool of potential sellers who may lock in profits. The closer to 100%, the more precarious the situation becomes.

Yes, during prolonged bear markets, supply in profit can remain below 60% for many months. These extended periods of widespread loss are painful but have consistently preceded the strongest recoveries, as weak hands gradually capitulate and transfer coins to conviction buyers.

Related Terms

MVRV Z-Score
A metric comparing Bitcoin's market value (current price times supply) to its realized value (the value of all coins at the price they last moved). Extreme high readings signal overvaluation; low or negative readings signal undervaluation.
Stock-to-Flow
A valuation model that prices Bitcoin based on its scarcity by dividing the existing supply (stock) by the annual production (flow). The model, popularized by analyst PlanB, suggests Bitcoin's price should increase after each halving as the flow is reduced.
NVT Ratio
The NVT (Network Value to Transactions) Ratio compares Bitcoin's market capitalization to its daily on-chain transaction volume. It functions similarly to a P/E ratio in traditional finance, measuring whether the network is overvalued or undervalued relative to its economic throughput.
Realized Cap
Realized Cap values each Bitcoin at the price it last moved on-chain rather than at the current market price. It represents the aggregate cost basis of all coins in circulation and serves as a more grounded measure of capital invested in the network.
Thermocap
Thermocap measures the total revenue paid to Bitcoin miners since the genesis block, calculated as the cumulative sum of all block rewards and transaction fees in USD terms. It represents the minimum cost of producing all existing Bitcoin.
SOPR (Spent Output Profit Ratio)
SOPR measures the profit ratio of coins moved on-chain by dividing the realized value of spent outputs by their value at creation. A SOPR above 1 means coins are moving at a profit on average, while below 1 means they are moving at a loss.

Related Content

Bitcoin Price History
Year-by-year Bitcoin price data from 2010 to today
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