In a recent analysis by on-chain analytics firm Santiment, major cryptocurrencies such as Bitcoin, Ethereum, and XRP are exhibiting a notable trend in profitability.
Santiment highlighted in a recent tweet that Bitcoin, Ethereum, and XRP Ledger currently boast more than 80% of their existing supplies in profit. This resurgence in profitability hasn’t been witnessed since March 2022. Presently, Bitcoin, ETH, and XRP are recording 83%, 84%, and 81% of their respective supplies in profit.
The metric of “Total Supply in Profit” serves as a valuable indicator to gauge the fluctuation in the overall supply on a network at any given moment. It provides a straightforward method to ascertain whether a coin’s current value exceeds or falls below its initial value during minting, mining, or circulation.
Concurrently, the percentage of total supply in profit examines the proportion of the available supply at a specific time, as opposed to the total number of coins in a network, indicating a binary perspective on the overall supply being in profit, even if marginally.
Despite these positive indicators, Santiment suggests that Bitcoin (BTC), XRP, and Ethereum (ETH) are currently operating with their supplies at historically high-risk profit levels, surpassing the typical 55%-75% range observed since 2018.
The percentage of total supply in profit provides a more immediate view of how the network is experiencing gains or losses on its investments over a shorter time frame.
This holds significance in the cryptocurrency realm, which operates as a zero-sum game. The analysis suggests that vigilance is necessary when networks are experiencing substantial profits, signaling potential market dynamics.
While this report doesn’t dismiss the possibility of further upward movements for Bitcoin and other cryptocurrencies, fueled by increased exposure from ETFs and positive news, Santiment emphasizes a crucial signal to monitor for sustained long-term growth: a breach below 75% of supplies in profit once again. This could indicate shifting dynamics in the market and warrant close attention from investors.
