Velocity

Velocity is a measure of how quickly units of currency are circulating in the network.

Indicator Overview

Velocity is a measure of how quickly units are circulating in the network, and is calculated by dividing the on-chain transaction volume (in USD) by the market cap (i.e. the inverse of the NVT Ratio).

How is it measured?

Velocity is calculated by dividing the on-chain transaction volume (in USD) by the market cap (i.e. the inverse of the NVT Ratio)

Velocity=1NVT Ratio=Transaction Volume [USD]Market Cap [USD]\textrm{Velocity} = \frac{1}{\textrm{NVT Ratio}} = \frac{ \textrm{Transaction Volume}~{\color{gray}{[\textrm{USD}]}} }{ \textrm{Market Cap}~{\color{gray}{[\textrm{USD}]}} }

Further Resources

Willy Woo - Bitcoin Velocity vs. US Money Stock