The BP Ratio, short for Buying Power Ratio, weighs the dollars waiting on-chain against what Bitcoin itself is worth. Putting the two side by side scales the waiting capital to the thing it might be spent on, which a bare total can never do.

That scaling is not decoration. The same pool is enormous set against a small market and negligible set against a large one, so an absolute figure carries no meaning across the record.

What it actually measures

A high reading says there is a considerable amount of sidelined capital relative to the market it faces. That is a statement about capacity, and about how far a given amount of buying would travel through that market if any of it were actually spent.

A low reading says the opposite: the pool is small next to the asset it faces, so it would take a great deal more of it to shift anything. Both are descriptions of the terrain rather than signals to act on, and neither carries a direction.

The reading is judged against its own history, because the relationship between the two quantities has drifted as both markets have grown.

In a rally it is the market that moves, not the pool

The reading usually falls during a strong advance, and it is tempting to read that as capital leaving. Almost never is that what happened: the pool has stayed put while the thing it is measured against has grown.

Understanding that mechanical effect is what stops the view being misread at exactly the wrong moment. A falling reading in a rising market is arithmetic, and a falling reading in a flat one is capital going home.

What it does not tell you

It cannot say whether the capacity will be used. The ratio has been high through long accumulation and through long stagnation alike.

The pool serves the whole market and not one asset. Comparing it against a single asset is a useful simplification, and it stays a simplification however carefully the reading is taken.

Both halves move for their own reasons. A change has to be traced to one side or the other before it means anything, and the line itself will never tell you which of the two did the moving.

How to read it

High ammo. Plenty of waiting capital measured against the size of what it might buy.

Moderate. An ordinary balance between sidelined dollars and the size of the market.

Low ammo. Little sidelined capital next to the size of the market.

The Stablecoin dashboard carries BP Ratio together with Market Cap, Issuer Composition and 60D Change.

Common questions

Why scale the pool at all?

Because an absolute figure means nothing across cycles. The same amount of sidelined money is overwhelming against a small market and trivial against a large one.

Does a high reading predict a rally?

No. It says the capacity is there, not that anybody intends to use it, and it has stayed high through long stretches when nothing happened.

Why does it fall when price rises?

Usually because the thing it is measured against grew while the pool stood still. It is arithmetic rather than capital leaving, and the two look identical on the line.

Is it specific to Bitcoin?

The comparison is, but the pool is not. Those dollars can be spent anywhere in this market, so the reading is a useful simplification rather than a precise claim about one asset’s buying pressure.

How should a change be read?

By working out which half moved. A falling reading means something entirely different depending on whether the pool shrank or the market grew.