The NVT Ratio (Network Value to Transactions) is a valuation metric that compares the market capitalization (network value) of a cryptocurrency to the volume of transactions on its blockchain over a specific period, typically daily.

It is calculated by dividing the market capitalization by the daily transaction volume (in USD). A higher NVT ratio suggests that the cryptocurrency is overvalued relative to the amount of transactions being conducted on the network, indicating speculative interest.

Conversely, a lower NVT ratio points to a cryptocurrency being undervalued or that the network is experiencing high usage relative to its market value, which could imply a more sustainable price level.

The NVT Ratio serves as a tool to gauge the investment attractiveness and potential speculative bubbles in digital assets.