Unit 1 · Level 3 · Exchange & stablecoin flows
Loaded and ready
Total stablecoin supply is the whole ammunition depot, but stablecoins sitting ON exchanges are shells already loaded. A rising exchange stablecoin balance means buying power is positioned where trades actually happen. Combine the two flows and you get a positioning picture: coins leaving exchanges while stablecoins arrive is the most bullish setup the flow data can paint. The reverse (coins arriving, stablecoins leaving) is the gloomiest.
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What you get asked
Why do stablecoins ON exchanges matter more for short-term positioning than total supply?
A dollar in a cold wallet is potential energy; a dollar on an exchange is a finger hovering over the buy button. Location reveals readiness.
Stablecoin balances on exchanges grow from €25B to €40B over a quarter. How many billions of € of extra on-exchange buying power arrived?
40 − 25 = €15B of fresh dry powder positioned on trading venues. Whether it fires is up to the holders, but the loading is visible.
Match each flow combination to its textbook positioning read
The two flows together beat either alone. But 'textbook read' means probability lean, not prophecy: mixed signals are the normal state.
The ratio of an asset's market cap to total stablecoin supply is sometimes used to judge how much ___ power exists relative to the asset's size.
That's the idea behind ratios like SSR (Stablecoin Supply Ratio): a big asset with a small cash pile has less fuel available than a small asset with a big one.
What's the honest limit of the 'stablecoins on exchanges = imminent buying' read?
Dry powder can stay dry for a long time: in 2022 stablecoin balances were fat while prices fell for months. Capacity is not a trigger. 🐜
The rest of this unit
Follow the money on and off exchanges. Where coins sit tells you what holders plan.