Market Dry Powder

Definition ∞ Market dry powder refers to the amount of uninvested capital, typically cash or highly liquid assets, held by investors and institutions, ready for deployment. This capital represents potential buying power that can be injected into markets when attractive investment opportunities arise. It is a significant indicator of latent demand and future market activity. The presence of substantial dry powder can influence market sentiment and price movements.
Context ∞ In the digital asset space, market dry powder is often tracked through the market capitalization of stablecoins, which serve as a primary reserve asset for crypto investors. News reports frequently cite stablecoin growth as a sign of accumulating dry powder, suggesting potential for upward price movements in Bitcoin and other cryptocurrencies. This metric offers a valuable perspective on investor readiness to allocate capital.