Analytics

XRP, BTC, ETH Show Surprising Profitability Trend, Biggest Signal to Watch

According to on-chain analytics firm Santiment, major cryptocurrencies Bitcoin, Ethereum and XRP are displaying an intriguing profitability trend.

In a new tweet, Santiment noted that Bitcoin, Ethereum and XRP Ledger all have more than 80% of existing supplies in profit. This trend was last observed in March 2022. Bitcoin, ETH and XRP are presently marking 83%, 84% and 81% of their supplies in profit.

💰 #Bitcoin (83%), #Ethereum (84%), and #XRPLedger (81%) have their respective supplies in historically high risk profit levels compared to their averages that hover in the 55%-75% range dating back to 2018. #Crypto can absolutely still climb due to more exposure from pic.twitter.com/ADmMcl5zhO

— Santiment (@santimentfeed) January 18, 2024

The “Total Supply in Profit” metric is an excellent way to determine how much the total supply on a network is up or down at any given time. This is a simple technique to determine whether a coin is worth more or less today than it was when it was initially minted, mined or entered circulation.

Meanwhile, the percent of total supply in profit analyzes whether the percentage of supply available at any particular time, rather than the total number of coins on a network, is up or down at any given time. This represents a binary way of seeing the ratio of the total supply simply being in profit, even if it is a very small profit.

That said, Santiment states that BTC, XRP and ETH have their supplies at historically high-risk profit levels compared to their averages, which have been in the 55%-75% range since 2018.

The percentage of total supply in profit offers shorter-term perspectives on how the network is profiting or losing value on its investments over time.

This matters because crypto is a zero-sum game. When networks are heavily profiting, according to this metric, then it is imperative to watch out.

This does not rule out further upside moves for Bitcoin and other cryptocurrencies due to more exposure from ETFs and other positive news; however, there might be something else to watch out for.

According to Santiment, a great signal to watch that would imply continued long-term growth would be a breach below 75% of their supplies in profit once again.

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