Direct Answer
The cumulative total of all miner issuance valued in USD at the price on the day each coin was issued. It is the total amount of money that the network has paid miners in newly created coins, and is commonly used as a measure of the cost the market paid to secure the chain. Thermocap only grows, and its growth rate falls as issuance halves, so it is used as a long-run yardstick for the total capital paid to miners.
Thermocap: Formula, Meaning, Signals, Examples and How to Use It
How Is Thermocap Calculated?
The cumulative total of all miner issuance valued in USD at the price on the day each coin was issued. It is the total amount of money that the network has paid miners in newly created coins, and is commonly used as a measure of the cost the market paid to secure the chain.
Formula: Thermocap = sum over all days of (coins issued that day x price that day)
Inputs:
- Daily coins issued (block subsidy)
- Daily price series
- Whether fees are included (provider specific)
Worked example. With 900 coins issued each day at illustrative prices of 40000, 42000 and 45000 USD, three days add 114,300,000 USD to thermocap. The inputs are illustrative numbers, not market data.
Reading it. Thermocap only grows, and its growth rate falls as issuance halves, so it is used as a long-run yardstick for the total capital paid to miners. It is chiefly useful as the denominator for the thermocap multiple.
Limits. It is a cumulative number, so it says little about current conditions on its own. Some versions include transaction fees and others do not.
What is Thermocap?
The cumulative total of all miner issuance valued in USD at the price on the day each coin was issued. It is the total amount of money that the network has paid miners in newly created coins, and is commonly used as a measure of the cost the market paid to secure the chain.
How to use Thermocap
Thermocap only grows, and its growth rate falls as issuance halves, so it is used as a long-run yardstick for the total capital paid to miners. It is chiefly useful as the denominator for the thermocap multiple. A reading alone is never a buy or sell signal; it needs context from price structure, volume, volatility and the broader market regime.
Strengths
- Valuing each day's issuance at that day's price accumulates what the market actually paid miners in dollar terms.
- Because only issuance and price enter, it can be rebuilt exactly from the subsidy schedule and a daily price series.
- Reproducible when the formula and data convention are fixed.
Weaknesses and limitations
- Early years of cheap issuance contribute little, so the total is dominated by later, higher-priced years and carries a long memory of past price.
- Dollar valuation at issuance ignores what miners did with the coins, so it is paid-out value and not profit or cost.
- Correlated indicators can create false confidence by repeating the same underlying information.
Editorial and risk note
This page is educational content, not individualized investment advice. It should not imply guaranteed prediction, accuracy or outperformance.
Frequently Asked Questions
Is Thermocap a buy or sell signal?
No. Thermocap only grows, and its growth rate falls as issuance halves, so it is used as a long-run yardstick for the total capital paid to miners. It is a cumulative number, so it says little about current conditions on its own. A trade built on it still needs a trigger, an invalidation rule, a position size and realistic execution assumptions.
What is the best setting for Thermocap?
Thermocap is computed from daily coins issued (block subsidy); daily price series; whether fees are included (provider specific), so the choices that matter are the data convention and the window it is read over. Test those across instruments, regimes and out-of-sample periods instead of fitting one historical winner.
Can Thermocap be used by itself?
It is a cumulative number, so it says little about current conditions on its own. Some versions include transaction fees and others do not. For that reason it is read next to measures of direction, participation, valuation, liquidity and risk, not alone.
Does Thermocap work on every timeframe?
The calculation (Thermocap = sum over all days of (coins issued that day x price that day)) can be run on any bar size, but behavior is not portable: a reading on a five-minute chart describes a very different market window from the same reading on a daily chart. Validate the exact timeframe before relying on it.
Why does Thermocap give false signals?
Early years of cheap issuance contribute little, so the total is dominated by later, higher-priced years and carries a long memory of past price. Dollar valuation at issuance ignores what miners did with the coins, so it is paid-out value and not profit or cost. Lag, noise and regime changes add to this, because market participants react to new information after the reading is calculated.
How should Thermocap be backtested?
Rebuild Thermocap from daily coins issued (block subsidy) using point-in-time data, write the rules before testing, include delisted securities where relevant, model realistic fills and costs, reserve a validation sample and compare with a simpler baseline.