Summary
This Thermocap Ratio line gets higher, as the total value of Bitcoin today gets progressively higher than the cumulative value of Bitcoin, when it was received by the miners.
Once the line gets to 400 (Bitbo, above) or 0.0000004 (Glassnode, below) it’s heading towards peak price territory. (In 2021 the price was suppressed, so it was around 340. Still, the Ratio line gives useful information such as bearish divergence.)
Uses of the chart
This has been one of the best charts for calling the major tops each 4 years – in 2013, 2017 and 2021.
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2013 – In November, this indicator gave a perfect bearish divergence on the second peak
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2017 – This tracked the price almost exactly – ie gave no advance warning, but it was spot on.
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2021 – Again, a bearish divergence gave perfect early warning that we had just passed the peak.
Nov 2013, Market Cap/Thermocap Ratiog
In these charts, Bitcoin price is the black line, Market Cap/Thermocap Ratio is in orange.
Nov 2017, Market Cap/Thermocap Ratio
Bitcoin price is the black line, Market Cap/Thermocap Ratio is in orange.
Apr 2021, Market Cap/Thermocap Ratio
Bitcoin price is the black line, Market Cap/Thermocap Ratio is in orange.
Will this predict the highs and lows?
This has been fantastic at predicting the highs, so far. So I have high hopes it will help us identify the next high which, right now, is expected in November 2025.
More definitions of these terms, by Google AI
Thermocap, or aggregate security spend, is a metric that measures the total amount of coins paid to Bitcoin miners, which can be used as an indirect measure of the cryptocurrency’s intrinsic value. It’s calculated by multiplying the total coinbase transactions by their price in USD at the time. Thermocap can also be calculated as the weighted sum of mined coins by their creation price, which is known as Inflows Cap.
The Market Cap to Thermocap Ratio is another metric that can be used to assess Bitcoin’s price. This ratio is calculated by dividing the market cap by the thermocap, and is adjusted to account for the increasing circulating supply over time. It can be used to determine if Bitcoin’s price is trading at a premium compared to the total security spend by miners.