Bitcoin’s position as a store of value (SoV) has reached a new milestone. The SoV Index, which measures the amount of capital stored in Bitcoin, hit $1.03 trillion on December 29, 2024.
Crypto analyst Ki Young Ju highlighted this achievement on X, noting Bitcoin’s growing recognition as a digital asset with long-term value.
#Bitcoin serves as a Store of Value (SoV).
So, how much capital is stored on the network?
Combining off-chain and on-chain data, the estimate is $1.03T, up 85% this year. pic.twitter.com/87db5xgK3k
— Ki Young Ju (@ki_young_ju) December 30, 2024
Read also : Goldman Sachs CEO: Bitcoin Could Serve as Store of Value, Hints at Fed Rate Cut Delay
The SoV Index combines on-chain and off-chain data to track Bitcoin’s journey from a niche digital currency to a mainstream financial asset. This recent surge represents an 85% increase from the previous year, underscoring Bitcoin’s continued emergence as an alternative store of wealth.
Understanding the SoV Index
The SoV Index uses several key data points to estimate the capital stored in Bitcoin. These include Realized Capitalization, Exchange Reserve, and Volume-Weighted Average Price (VWAP). By combining these metrics, the index provides a more complete picture of Bitcoin’s value than just its market price.
Source: X
Unlike traditional market capitalization, which reflects Bitcoin’s current market value, the SoV Index incorporates additional factors like exchange transaction volume and the cost basis of Bitcoin movements.
This metric has tracked Bitcoin’s growth over the years. It remained relatively flat until 2017 when global economic uncertainties and growing institutional interest drove up prices.
Bitcoin Price and SoV Index Correlation
Both Bitcoin’s price and the SoV Index have shown growth over time. However, the SoV Index offers a more nuanced understanding of Bitcoin’s role as a store of value. In the early years, both metrics remained low, reflecting Bitcoin’s limited adoption. Around 2013, as Bitcoin gained wider recognition, both metrics began to rise.
Interestingly, the gap between Bitcoin’s price and the SoV Index has widened in 2024. This suggests that Bitcoin’s value as a store of wealth is growing, even as its market price fluctuates.
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