Crypto glossary
NVT ratio
The NVT ratio divides a blockchain's network value by its daily on-chain transaction volume, acting as a rough price-to-earnings measure for crypto networks.
Network value to transactions, proposed by analyst Willy Woo in 2017, takes the market capitalization of a coin and divides it by the dollar value transferred on its chain, usually over a day or a smoothed period. The logic mirrors a P/E ratio: transaction volume stands in for the economic use that should support the network's valuation. A refined version, the NVT signal, uses a 90-day moving average of volume.
High NVT suggests the price is running ahead of on-chain use, which some read as a speculative bubble; low NVT suggests heavy usage relative to value. On-chain analytics platforms chart it for Bitcoin and other networks alongside MVRV and realized-cap metrics.
Its weaknesses are significant. Much trading now happens on exchanges, Lightning and layer 2s, so on-chain volume misses it, while exchange shuffling and change outputs can inflate it. A network used mainly as a store of value can show high NVT without being overpriced. Treat it as one indicator among several.
Example
Bitcoin's market cap rises 40% in a month while on-chain transfer volume stays flat, so the NVT ratio climbs to its highest level in a year.