Definition ∞ The Stablecoin Supply Ratio, a metric that compares the market capitalization of all stablecoins to the market capitalization of a specific cryptocurrency, often Bitcoin. This ratio indicates the purchasing power held in stablecoins relative to a major digital asset. It provides insight into potential buying pressure in the market.
Context ∞ The Stablecoin Supply Ratio is widely used by market analysts to gauge the readiness of capital to enter volatile digital asset markets. A rising ratio can suggest significant dry powder available for investment, potentially indicating future upward price movements. Monitoring this metric helps assess overall market liquidity and the prevailing sentiment among digital asset holders.
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