Santiment has revealed how major cryptocurrencies like XRP, Bitcoin, and Dogecoin currently compare regarding supply profitability.
XRP, Dogecoin, And Other Assets Compared On Basis Of Profitability
In a new post on X, the on-chain analytics firm Santiment discusses how the various top coins in the cryptocurrency sector currently stand in terms of Supply in Profit.
The “Supply in Profit” here refers to an indicator that keeps track of the total percentage of any given asset’s supply in circulation that’s currently carrying some amount of net unrealized profit.
Unlike the version of this metric from some other analytics firms, where a coin is decided to be in profit or loss by comparing the spot price against the last price at which the coin transferred on the blockchain, Santiment’s indicator instead uses the price at which the token was initially mined as its “cost basis.”
With this methodology, all asset tokens mined at a higher price than the current one would stand in loss, while those mined at lower prices would be considered in profit.
Naturally, the Supply in Profit sums up all coins satisfying the latter condition and calculates what percentage of the total circulating supply they make up for.
Now, here is a chart that shows the trend in the Supply and Profit for some of the largest coins in the sector over the past few months:
Looks like Bitcoin is at the top of this list at the moment | Source: Santiment on X
As displayed in the above graph, the worst top coin in terms of Supply in Profit out of the coins in the list is Cardano (ADA), which has just 53.5% of its tokens in the green.
XRP (XRP) is the second worst at 78.84%, while Dogecoin (DOGE) is just above with 82.16% of the supply above water. In terms of the best performing assets, Bitcoin (BTC) and Ethereum (ETH) stand out, with the indicator at 98.3% and 95.1%, respectively.
This means that these two coins, the largest in the sector based on market cap, have nearly all of their supply mined below their current spot price.
Under the X post, a user asked Santiment about the situation with Polygon (MATIC). The analytics firm replied with a chart for the asset, showcasing that 35% of its supply is in profit based on this metric.
The value of the indicator appears to be quite low for MATIC right now | Source: Santiment on X
This means that Polygon is worse in this metric than the likes of Cardano, XRP, and Dogecoin. Santiment explains, though, that the trend “likely has something to do with MATIC being introduced amid the 2019 bear market. So with this particular metric, it started out with quite a bit of a handicap.”
Now, what significance does the Supply in Profit hold for any cryptocurrency? Usually, the higher the supply in profit for any asset, the more likely it is for a selloff to occur.
Thus, it’s possible that coins with extreme profitability could be near at least a local top. Assets with a relatively lower value of the metric, like XRP or Dogecoin, on the other hand, may have more room to grow before profit-taking becomes a significant threat.
XRP Price
At the time of writing, XRP is floating around $0.52, up 1% over the past week.
The price of the asset appears to have not moved much over the last few days | Source: XRPUSD on TradingView