Third highest rate of stablecoin outflows into Bitcoin in 5 years Third highest rate of stablecoin outflows into Bitcoin in 5 years

Third highest rate of stablecoin outflows into Bitcoin in 5 years

When significant quantities of stablecoins outflow into Bitcoin โ€” this often indicates local tops are in, according to the charts.

Definition

  • The Stablecoin Supply Ratio (SSR) is the ratio between Bitcoin supply and the supply of stablecoins denoted in BTC, or: Bitcoin Market cap / Stablecoin Market cap. We use the following stablecoins for the supply: USDT, TUSD, USDC, USDP, GUSD, DAI, SAI, and BUSD.
  • When the SSR is low, the current stablecoin supply has more “buying power” to purchase BTC. It serves as a proxy for the supply/demand mechanics between BTC and USD.

Quick Take

  • The stablecoin supply ratio has broken the upper bound for the third time in five years.
  • This suggests stablecoins are being redeemed for Bitcoin, which is encouraging during a risk-off environment and not being redeemed for dollars.
  • The last two times the SSR broke the upper BB was in Jan 2021 and June 2019, when Bitcoin hit a local top on both occasions.
  • The SSR is still relatively close to all-time lows โ€” suggesting a lot of stablecoin buying power is still yet to be deployed.
SSR: (Source: Glassnode)
SSR: (Source: Glassnode)