Stock-to-Flow Model

Bitcoin price prediction based on scarcity - tracks the relationship between total supply (stock) and annual production (flow)

Stock-to-Flow Model

Bitcoin price vs Stock-to-Flow scarcity model

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Blue area: Actual Bitcoin price |Green line: S2F model prediction

S2F Model: Predicts Bitcoin price based on scarcity. Stock = total supply, Flow = annual production. Higher S2F ratio = greater scarcity = higher predicted price. The model has historically tracked Bitcoin's major bull and bear cycles.

Stock (Supply)

—

Total mined coins

Flow (Inflation)

—

Annual new supply

S2F Ratio

—

Scarcity measure

S2F Model: Scarcity-based valuation model with 95% historical correlation

Understanding the Stock-to-Flow Model

The Stock-to-Flow (S2F) model is a quantitative framework that predicts Bitcoin's price based on its scarcity. Popularized by analyst PlanB, the model measures the relationship between the total existing supply (stock) and the amount of new supply entering the market annually (flow).

Bitcoin undergoes a "halving" event approximately every 4 years, reducing the block reward by 50%. This programmatic reduction in flow increases the S2F ratio, making Bitcoin increasingly scarce over time. The model suggests that this increasing scarcity drives long-term price appreciation.

The S2F model has shown remarkable correlation with Bitcoin's price across multiple market cycles. While not perfect, it provides a useful framework for understanding Bitcoin's long-term value proposition as "digital gold" with predictable, decreasing supply inflation.

Key Features:

• Logarithmic Price Scale: Chart uses log scale to better visualize exponential growth over multiple orders of magnitude.
• Halving Events: Visual markers show historical and projected halving events that reduce new supply.
• Model vs Reality: Compare actual Bitcoin price (blue) against S2F model prediction (green).
• Real-time Metrics: Live calculations of stock, flow, and S2F ratio based on current block height.

How to Use This Indicator

For Long-term Investors:

Use S2F as a framework for understanding Bitcoin's scarcity thesis. When price is below the model, it may represent a buying opportunity. When significantly above, consider taking profits.

For Cycle Timing:

Historically, Bitcoin has mean-reverted to the S2F model line after deviating. Large deviations above or below can signal market extremes.

Understanding Limitations:

S2F is a supply-side model and doesn't account for demand shocks, regulation, or technological changes. Use in combination with other indicators.

Pro Tips:

• The model works best over multi-year timeframes, not for short-term trading
• Significant deviations from the model have preceded major trend changes
• Each halving creates a new S2F regime with different price dynamics
• Consider the model as one tool among many, not a crystal ball
• Price can remain above or below the model for extended periods

Model Calculation & Data

Stock-to-Flow is calculated using Bitcoin's transparent supply schedule. Stock = total mined coins, Flow = annual production (current block reward × 52,560 blocks/year). The model price is derived from a conservative dampened formula: Price = exp(4.019) × S2F^1.65. Data is sourced from blockchain and aggregated exchange prices.

95%

Historical R²

4yr

Halving Cycle

Stock-to-Flow Model