On Wednesday, the Bitcoin Stablecoin Supply Ratio was 10.6. This is close to the floor of everything that can be seen on the chart and is often read as maximal buyer power sitting out of the way. The largest cryptocurrency is now trending at $66.6k. For the buyers this ratio suggests are nowhere in the order flow.
A ratio which is at low range
SSR is calculated by the market cap of BTC divided by the sum of the market cap of stablecoins. A lower reading indicates that there is a larger pool of stablecoins in comparison to BTC. This means that higher theoretical purchase power for $1 of BTC. The metric ranges between about 9 and 20 for the past year; the current ratio of 10.6 is close to the bottom.
This kind of heavy compression only took place in February. Followed by the time, price, and ratio bottoming simultaneously as BTC shifted toward the $65k level. It was followed by recovery, but a gradual one. Bitcoin only rallied to the low 80s range by May, which took up the better part of three months, and only after a significant capital inflow. The important thing was that the ratio did not carry a price on its own.
The $320 billion looks bigger than it spends
Artemis counts the total stablecoin supply at $320.5 billion, while $3.8 trillion crossed stablecoin rails in a single day via 1.8 billion transactions. This can be termed a massive figure. The stablecoin pools, like Tether (USDT) and USDC, that would likely migrate to BTC, combined worth $266 billion, have been bleeding for last month. Like the stablecoins, including USDT by 1 percent and USDC by 2.36 percent. The supply that would actually rotate to chase BTC shrunk while the price for Bitcoin was on the fall and that’s not accumulation.
It was also influenced by the additional factors. RLUSD is up 17.68 percent, and this is primarily circulating within XRP. USYC is up 13.81 percent, a Treasury wrapper offering people to get paid in cash. USDe is up 10.53 percent, and there’s a surge in synthetic dollars in DeFi. USDS technically experienced a rise but on the other side, transaction count fell 45 percent. The thing to note is that the supply is there, but no one is using it. The stablecoins growing the most quickly don’t have that strong reason to purchase bitcoin. Those that do have reason to purchase bitcoin are getting smaller.
USDC moves but USDT settles
The velocity split is making the read sharper. The USDC has transacted $141.2 billion in volume over the time period of 24 hours on less than $78 billion in float. The USDT has transacted $71.2 billion over more than twice the amount of float. Spin the turnover, and the market participants can figure out that USDC is going with 181 percent of float daily while USDT is sitting at around 38 percent of float daily.
There’s a more complex tell in the USDT line. The relative volume has experienced a rise of 16.39 percent over the month despite supply falling by 1 percent. An increasing velocity compared to a decreasing float is indicative of settlement and transactional activity, the dollar circulating from account to account. In addition to this, USDC transaction count increased 30.30 percent over the same window while USDS fell apart, indicative of activity settling into the most liquid, regulated venue.
Appears more of just saving without the trigger of dry powder
The metric assumes that all stablecoins are immediately ready to buy Bitcoin. Much of the supply is earning yield or is domiciled elsewhere, and there is optimism about true capability by a large amount but in this case that is not the intent. The signal that closes that gap is USDT issuance trending back up with price holding.