The realized price represents the average cost at which all current Bitcoin holders bought their coins. Essentially, it provides a snapshot of the “collective memory” of the market, capturing the price at which the last transaction of each Bitcoin took place. Determining Bitcoin’s realized price is crucial as it offers insights into the actual profitability of the market’s participants. However, like any metric, it’s not without flaws. A potential drawback is that it doesn’t account for lost or dormant coins, potentially skewing the estimation.
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