BTC Withdrawal Cost Basis Signals Market Optimism
Record highs — be it $20,000 in 2017, $69,000 in 2021 and $109,000 this year — are great for headlines and quick comparisons, but in reality don't do a great job of describing price action.
Tracking the "realized price," or the average price at which bitcoin
is withdrawn from all exchanges to estimate a market-wide cost basis is a more valuable tool for gauging investor profitability and potential inflection points in market sentiment.The charts (above and below) illustrate the average withdrawal prices for different investor cohorts, segmented by the year they entered the market starting Jan. 1 of each year from 2017 to 2025.
The average realized price for the 2025 so far is $93,266. With bitcoin currently trading at $105,000, these investors are up approximately 12% on average.
When bitcoin began its decline from the all-time high of $109,000 in late January, it briefly fell below the 2025 realized price, a historical signal of capitulation. This period of stress lasted until April 22, when the price reclaimed the cohort’s cost basis.
Historical Context: Capitulation Patterns
Historically, when price falls below a cohort’s realized price, it often marks market capitulation and cyclical bottoms:
- 2024: After the ETF launch in January, bitcoin dipped below the average cost basis before rebounding. A more significant capitulation followed in the summer, linked to the yen carry trade unwind when bitcoin plunged to $49,000.
- 2023: Price tracked close to the average cost basis during support levels, only briefly breaking below during the Silicon Valley Bank crisis in March.
The data suggests that a capitulation phase has likely occurred, positioning the market for a more constructive phase. Historically, recoveries from such events mark transitions into healthier market conditions.
Realized, not record
When bitcoin first surpassed $20,000 during the 2017 bull market, it marked a significant divergence between the market price and the realized price of just $5,149, highlighting a phase of exuberant speculation. Unsurprisingly, prices very shortly after went into a brutal reversal.
In contrast, by the depths of the 2018 bear market when bitcoin bottomed around $3,200, price at that point converged with the all-time realized price, a metric that aggregates the cost basis of all investors across cycles.
This long-term cost basis acts as a foundational support level in bear markets and gradually rises over time as new capital enters the market. Therefore, evaluating bitcoin solely by comparing cycle peaks, for example, from $69,000 in 2021 to just over $100,000 in 2025, misses the bigger picture.
The more relevant insight is that the aggregate cost basis of all investors continues to climb, underscoring the long-term maturation of the asset and the increasing depth of capital committed to the network.
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