The Spent Output Profit Ratio (SOPR) is a metric used to gauge the profitability of Bitcoin transactions. It is calculated by dividing the realized value of a spent output (in USD) by its value at creation (USD). Simply put, it measures the price at which Bitcoin was sold compared to the price it was originally purchased.
SOPR Trends in 2024
Throughout 2024, the Bitcoin SOPR has shown significant fluctuations. For the most part, the SOPR has remained near or above the 1.0 mark, indicating that many Bitcoin transactions were profitable.
Recent Declines in SOPR
However, in July and early August, the SOPR saw sharp declines, briefly falling below 1.0. This drop suggests that Bitcoin holders were selling at a loss during these periods, possibly due to broader market corrections.
Long-Term SOPR and Market Implications
Since 2018, the SOPR has been closely linked to Bitcoin’s price movements, often spiking during price rallies. The recent trends in SOPR reflect the market’s struggle with post-halving volatility. As Bitcoin continues to trade near $60,000, monitoring SOPR movements will be crucial. It will help determine whether the market is moving back to profitability or if more losses are on the horizon.
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