The Bitcoin Stock to Flow (S2F) model has become one of the most widely discussed frameworks for forecasting the long-term price of Bitcoin. Rooted in commodity valuation principles, the model leverages Bitcoin’s fixed supply schedule to project future scarcity and, by extension, potential price growth. While not without controversy, the S2F model offers a compelling narrative for why Bitcoin could continue appreciating over time—especially as halving events reduce new supply.
This article explores the mechanics of the Stock to Flow model, its application to Bitcoin, and how it attempts to predict price movements based on supply dynamics. We’ll also examine its historical accuracy, limitations, and relevance in today’s evolving crypto landscape.
Understanding Stock to Flow (S2F)
Stock to Flow is a metric traditionally used to assess the scarcity of commodities like gold and silver. At its core, S2F measures how much of an asset currently exists (stock) compared to how much new supply is produced annually (flow).
- Stock = Total existing supply
- Flow = Annual new production
By dividing stock by flow, you get the S2F ratio—the number of years it would take to reproduce the current supply at today’s production rate. A higher ratio indicates greater scarcity, which often correlates with stronger store-of-value characteristics.
For example:
Gold has an estimated total supply of 300,000 tons, with around 3,500 tons mined each year.
S2F Ratio = 300,000 ÷ 3,500 ≈ 85.7
This means it would take over 85 years of current mining output to match existing gold reserves—highlighting its scarcity.
👉 Discover how digital scarcity drives value in modern assets.
Bitcoin's Stock to Flow Ratio Over Time
Bitcoin was designed with a predictable issuance schedule, making it uniquely suited for S2F analysis. Unlike gold or silver—where total reserves are estimates—Bitcoin’s supply is mathematically fixed at 21 million coins, with new issuance halving approximately every four years.
Here’s how Bitcoin’s S2F ratio evolves across key milestones:
- 2023: 19.25M BTC in circulation | 328,500 BTC/year | S2F = 58
- 2025 (post-halving): ~19.8M BTC | 164,250 BTC/year | S2F = 120
- 2029: ~20.4M BTC | 82,125 BTC/year | S2F = 248
- 2033: ~20.7M BTC | 41,062 BTC/year | S2F = 504
Each halving event cuts the flow of new Bitcoin in half, sharply increasing the S2F ratio. This programmed scarcity mimics the natural depletion seen in precious metals but with algorithmic precision.
Compared to other assets:
- Gold: S2F ≈ 85
- Silver: S2F ≈ 22
- Platinum & Palladium: S2F < 1
- USD (M2 supply): S2F ≈ 21
Bitcoin’s trajectory shows it moving from being less scarce than gold in 2023 to far surpassing it by 2030—potentially redefining what constitutes a high-S2F asset.
The Role of Bitcoin Halving Events
The Bitcoin halving is central to the S2F model. Every 210,000 blocks (roughly every four years), the block reward given to miners is cut in half. This reduces the annual supply of new Bitcoin, directly impacting the “flow” component of the S2F equation.
Currently (as of 2024), miners receive 3.125 BTC per block—down from 6.25 BTC in the previous cycle. With fewer coins entering circulation, and demand either stable or growing, basic economics suggests upward price pressure.
Historically, halvings have preceded major bull runs:
- 2012 Halving → 8,000%+ price increase within 12 months
- 2016 Halving → ~3,000% gain over 18 months
- 2020 Halving → ~700% rise over two years
While past performance doesn’t guarantee future results, the pattern reinforces the idea that reduced supply shocks can catalyze significant price appreciation—especially when demand remains strong.
Origins of the Bitcoin Stock to Flow Model
The Bitcoin-specific S2F model was introduced by an anonymous analyst known as Plan B, who published his research in 2019. What sets this model apart is its use of regression analysis to correlate Bitcoin’s historical price with its evolving S2F ratio.
Plan B plotted:
- X-axis: Bitcoin’s S2F ratio over time
- Y-axis: Bitcoin’s market price (log scale)
- Overlay: A best-fit curve showing expected price at each S2F level
The result? A striking correlation between Bitcoin’s actual price and its predicted value based solely on supply scarcity.
Because Bitcoin’s supply schedule is fully transparent and unchangeable, this model allows for long-term projections—something impossible with opaque commodities like gold.
👉 See how predictable supply impacts asset valuation trends.
Why Use a 463-Day Moving Average?
To smooth out short-term volatility and align with Bitcoin’s market cycles, Plan B applied a 463-day moving average to both supply and price data.
Why 463 days?
It stems from an observation by investor Preston Pysh, who proposed that Bitcoin markets follow a three-phase cycle:
- Bull Run – Rapid price increase
- Correction – Sharp pullback
- Reversion to Mean – Consolidation before next cycle
Assuming ~144 blocks are mined per day and using a modified cycle length of 200,000 blocks (instead of the standard 210,000), each phase lasts:
200,000 ÷ 3 ≈ 66,667 blocks
66,667 ÷ 144 ≈ 463 days
This window captures a full market phase, filtering out noise and highlighting structural trends rather than speculative swings.
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Limitations of the S2F Model
Despite its popularity, the S2F model has notable limitations:
Ignores Demand Dynamics
The model focuses exclusively on supply scarcity but says nothing about demand—which is equally critical in determining price. For instance:
- A major security breach could crater demand regardless of low issuance.
- Regulatory crackdowns might suppress adoption despite high scarcity.
- Macroeconomic shifts (e.g., inflation, interest rates) influence investor behavior independently.
Past Correlation ≠ Future Accuracy
While Bitcoin’s price has historically tracked the S2F curve closely—especially post-halving—it has also deviated significantly:
- In 2013–2015: Price diverged but eventually reconnected.
- Since 2021: The model has consistently overestimated price.
Such deviations suggest that while S2F may describe long-term trends, it lacks precision for short-to-medium-term forecasting.
Other Bitcoin Forecasting Models
The S2F model isn’t alone in attempting to predict Bitcoin’s price.
One popular alternative is the Bitcoin Rainbow Chart, which uses logarithmic regression and color-coded bands to indicate market sentiment—from “cheap” (blue) to “overbought” (red). Like S2F, it helps investors identify potential buy or sell zones based on historical patterns.
However, both models share a common weakness: they rely heavily on historical data and assume recurring cycles—a risky assumption in rapidly evolving markets.
Frequently Asked Questions (FAQ)
What Is the Plan B Stock-to-Flow Bitcoin Prediction?
Plan B’s model applies traditional commodity scarcity metrics to Bitcoin, using regression analysis to forecast prices based on its rising S2F ratio. It predicts Bitcoin could reach $1.25 million by 2026, assuming continued adoption and no major disruptions.
Is the Bitcoin Stock-to-Flow Model Broken?
Not necessarily. While the model has underperformed since 2021, similar deviations occurred in earlier cycles (e.g., 2013–2015) before prices realigned. Whether it "recovers" depends on whether market participants continue valuing Bitcoin primarily through a scarcity lens.
How Is Stock-to-Flow Calculated?
S2F = Current Circulating Supply ÷ Annual New Supply
For Bitcoin: Divide total BTC in existence by the number of BTC mined in a year.
Has the S2F Model Been Historically Reliable?
Yes—within reason. The model has shown strong correlation over full market cycles but often lags during corrections or extended bear markets. It works best as a long-term guide rather than a timing tool.
What Will Bitcoin’s S2F Ratio Be in 2030?
By January 1, 2030, Bitcoin’s S2F ratio is projected to be around 249, with an annual inflation rate of just 0.4%—lower than gold’s ~1.8%. This reinforces its case as a deflationary store of value.
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