Velocity compares on-chain transfer volume with Bitcoin Market Cap. Here the numerator is the USD value of coins spent on-chain during the day, so the ratio asks whether daily transfer flow is large or small relative to current valuation.
A rising series points to heavier transfer activity relative to market cap. A falling series usually means valuation is expanding faster than observed on-chain flow. It is most informative when price and transfer flow diverge, and it fits naturally beside NVT Ratio and Velocity Adjusted.
The main caveat is that raw transfer volume is noisy, and velocity inherits that noise directly. Wallet reshuffling, exchange internal transfers, and other operational flows can push the ratio sharply higher without indicating broader settlement demand, making a raw spike look like activity growth even when underlying usage has barely changed. For that reason, raw velocity works better as a first-pass flow measure than as a clean estimate of network usage.
Read full methodology