Please note: By consensus, we have renamed the “MTV” (market to transaction value) to “NVT” (network value to transactions ratio). We’re leaving this post as is, aside from changing some links. 

Currency serves as a medium of exchange, store of value, and unit of account. The Market to Transaction Value metric captures its efficacy at enshrining that first property. For a cryptocurrency to intermediate effectively, it must have sufficient on-chain volumes. This reduces spread size and enhances convenience. Of course gross numbers aren’t particularly comparable, so we construct a ratio between transaction volume and market cap. We extract actual transaction volumes from blockchain explorers and construct a time-series metric so you can see how the market cap to volume ratio changes over time.

Find our updated table and chart over at

While market cap is a occasionally misleading name for the outstanding value of a set of tokens, we call this the Market cap to Transaction Value. Thus smaller, emerging cryptocurrencies can still fare well if they have large transaction volumes relative to aggregate currency value. A high ratio indicates that the currency is expensive relative to its actual transaction volumes. It could indicate optimism on the part of investors, who assume that transaction volumes (and hence utility) will increase in the future, or it could indicate overvaluation. Conversely, a low MTV ratio may indicate undervaluation, or pessimism about the future prospects of the currency. In this respect it might be compared to a P/E ratio, although volumes are not analogous to earnings, but rather a measure of the underlying utility of the cryptocurrency.

Here we compare a cross section of assets by MTV ratio and present time series data so you can visualize its change over time. Since both market cap and on-chain volumes tend to be fairly erratic, it can change rapidly. However, we believe this metric is one of the essential tools in understanding a currency’s value relative to its actual usage.

It delivers time series and cross-sectional insights. We encourage you to investigate prior MTV peaks (troughs) and see whether they are reliable indicators of over (under) valuation. From a cursory look, both the BTC and ETH ratios have generate some interesting buy and sell signals, with the benefit of hindsight.

To be useful to investors, the best fundamental ratios have five qualities: they are measurable, they mean-revert, they make economic sense, they predict future returns, and they are fundamentally stable. I believe that the MTV ratio satisfies many of these properties, although perhaps more on the aggregate scale rather than for an individual asset. We will elaborate on its usefulness in future posts.

We are constantly adding cryptoassets to the MTV chart, although datamining takes some time, so this is an iterative process. We have thus far prioritized currency-style cryptoassets, for which actual on-chain transaction volumes are paramount. For speculative tokens supporting a startup or project still in development, transaction volumes are less relevant – as these tokens will be judged on different metrics.

The MTV indicator isn’t perfect, as it relies on the thoroughly flawed market cap indicator, but it is a way to couch the relative utility of competing cryptoassets in a comparable manner. Since on-chain volume is costly, the ability of cryptoassets to support large volumes relative to their market cap tells us an interesting story.

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