Crypto glossary
Stablecoin supply ratio (dry powder)
The stablecoin supply ratio compares bitcoin's market cap with the supply of stablecoins, used to gauge how much buying power sits on the sidelines.
The ratio, often abbreviated SSR, divides bitcoin's market capitalisation by the combined market cap of major stablecoins. A low SSR means stablecoins are large relative to bitcoin, so there is more potential buying power, often called dry powder, ready to enter the market. A high SSR means stablecoin balances are small compared with the asset they might buy.
Analysts also track related measures, such as total stablecoin supply, monthly growth in issuance and stablecoin balances held on exchanges, which are closer to being deployed. Rising stablecoin supply has historically accompanied periods of growing market activity, since stablecoins are the main trading currency in crypto.
Stablecoins are not only idle cash waiting to buy bitcoin. Large amounts are used for payments, remittances, DeFi lending and as collateral, or sit in treasuries and market-maker inventories. A low ratio signals potential, not intention, and the indicator has given mixed timing signals.
Example
After months of decline, the stablecoin supply ratio reaches its lowest level in two years while exchange stablecoin balances rise. Analysts describe it as a build-up of dry powder.
Related terms
Latest articles on Stablecoin supply ratio
- Stablecoin Supply Posts Largest 30-Day Drop Since June 2022
- Euro Stablecoin Supply Hits $848.1M After Adding $156M This Year
- Sui Stablecoin Supply Nears $500M as Network Volume Surpasses $65B
- XRP Takes a Hit? Ripple Drives Ethereum Stablecoin Supply Toward Record High
- Yield-bearing stablecoin supply drops $3.5B in Q2, ending nearly three years of growth