Stablecoin Supply Ratio (SSR)
Stablecoin Supply Ratio (SSR) is defined as a ratio of the Market Cap of BTC divided by the Market Cap of all Stablecoins

Definition

Stablecoin Supply Ratio (SSR) is defined as a ratio of the Market Cap of BTC divided by the Market Cap of all Stablecoins.
SSR=Market Cap of BTC Market Cap of stablecoins\text{SSR}=\frac{\text{Market Cap of BTC }}{\text{Market Cap of stablecoins}}

Interpretation

In understanding SSR, understanding the function of stablecoin and its assumption should be done.
First, stablecoins play an important role in the cryptocurrency market as a fiat currency like USD in the regulated market. This is because fiat currencies like USD as a supplier of liquidity have a lot of regulation issues.
Second, SSR is easy to understand when there is an assumption that the market is a closed system containing only cryptocurrencies and stablecoins. The relationship between BTC and Stablecoins is like seasaw and provide valuable insight on who has more weight at the moment.

By value itself

It shows comparative power status between BTC and Stablecoin by comparing market cap
  • High : Low Potential Buying Pressure - Bearish
High values mean Low Stablecoin supply compared to the market cap of BTC indicating potential low buying pressure and possible price drop.
  • Low : High Potential Buying Pressure - Bullish
Low values mean high Stablecoin supply compared to the market cap of BTC indicating potential buying pressure and possible price rise.

By examining trend

It shows the level of Exchange Activeness & Volatility
  • Increasing trend : Slowing down status of stablecoin's buying power - Bearish or sideways sentiment
  • Decreasing trend : Rising status of stablecoin's buying power - Bullish

Note

  1. 1.
    Additional stablecoins could be minted anytime disrupting the assumption that crypto market is a closed system. However, as crypto market continues to expand, additional mint would gradually lose its impact on the model.
  2. 2.
    As time passes, the degree of values' meaning could differ on level.

Link to Our Data

Last modified 15d ago