The stock to flow model explained in its simplest form: it's a framework that measures how scarce an asset is by comparing how much of it exists to how much new supply is being created. Applied to Bitcoin, it's become one of the most referenced - and most debated - macro valuation tools in crypto. Understanding it won't tell you what Bitcoin does tomorrow. But it will change how you think about what Bitcoin is.
⚡ Key Takeaways
- Stock-to-flow (S2F) measures scarcity as a ratio: total existing supply ÷ annual new production
- Bitcoin's post-2024 halving S2F ratio is approximately 113-120 - surpassing gold's ~65
- The model was created by pseudonymous Dutch analyst PlanB in a 2019 research paper
- Each Bitcoin halving cuts the flow by 50%, roughly doubling the S2F ratio
- S2F is a supply-side model only - it cannot account for demand, regulation, or macro factors
- Use it as one lens among several, not as a price prediction guarantee
What Is the Stock-to-Flow Model? Definition, Formula & Origins
Stock-to-flow starts with a deceptively simple question: how long would it take, at current production rates, to replicate the existing supply of an asset? The answer - expressed as a ratio - is the S2F number.
📊 The Formula
S2F Ratio = Total Stock ÷ Annual Flow (Annual Production)
When that ratio is high, it means production is slow relative to the existing supply. The asset is scarce. When it's low, new supply is constantly flooding the market, diluting its value. Gold, silver, and Bitcoin all sit on the high end - which is exactly why they're analyzed with this model.
Consider gold: roughly 185,000 tonnes exist above ground, and approximately 3,000 tonnes are mined each year. That gives gold an S2F ratio of about 65 - meaning it would take 65 years of current production to match the existing stock. That scarcity is a big part of why gold has held monetary value for centuries.
Bitcoin applies the same logic to a digital asset. The difference? Bitcoin's supply schedule is mathematically fixed, publicly verifiable on-chain, and immune to central bank decisions. That precision is something gold and silver simply can't match.
Bitcoin's post-2024 halving S2F ratio of ~113 now sits nearly double that of gold - a milestone that the model's proponents consider historically significant. Whether that translates into price is a separate debate, which we'll get to.
How the Formula Is Calculated: Step-by-Step
Working through the Bitcoin S2F calculation makes the model concrete.
Step 1: Identify current BTC supply. As of 2026, approximately 19.7 million BTC have been mined into existence. The blockchain records this transparently - there's no estimation involved.
Step 2: Calculate annual flow. After the April 2024 halving, each successfully mined block rewards miners with 3.125 BTC. With roughly 144 blocks mined per day (one every ~10 minutes), that gives:
The halving didn't just slow supply - it approximately doubled the scarcity ratio overnight. That predictability is Bitcoin's defining advantage for S2F analysis. Gold mining responds to price signals and geological constraints. Bitcoin's schedule is hardcoded and visible to everyone.
PlanB and the Origins of Bitcoin's S2F Model
The S2F model as applied to Bitcoin traces back to a single 2019 Medium article by an anonymous Dutch institutional investor operating under the pseudonym PlanB - known on X (formerly Twitter) as @100trillionUSD, a reference to Zimbabwe's hyperinflation-era 100 trillion dollar banknote. The handle itself telegraphs his thesis: fiat currency is structurally inflationary; hard-capped digital assets are the antidote.
PlanB's background is in quantitative finance and monetary theory - 25+ years in institutional investment. That combination - rigorous mathematical modeling applied to questions of monetary value - is what gave the original S2F paper its credibility with serious analysts.
After the original S2F model gained traction, PlanB developed the S2FX (Stock-to-Flow Cross-Asset) model, which added market capitalization as a second variable and grouped Bitcoin's price history into "phase clusters" - similar to how silver and gold represent different phases of monetary adoption. The S2FX model attempts to identify when Bitcoin transitions between these phases and projects much higher long-term price targets accordingly. It's more ambitious, more controversial, and requires accepting that Bitcoin's adoption follows a pattern similar to historic commodity monetization cycles.
The Role of Bitcoin Halving in the S2F Model
Every 210,000 blocks - roughly every four years - the Bitcoin protocol executes a halving. The mining reward drops by 50%, cutting the annual flow in half while the existing stock continues to grow. For the S2F ratio, this is the defining event: halve the flow, roughly double the scarcity metric. You can read more about how Bitcoin halving works and why it matters for long-term price structure.
The historical progression tells the story clearly:
Each halving has been followed - with varying lag times - by a new price peak that exceeded the previous cycle's high. The S2F model interprets this as evidence that diminishing flow, not speculation alone, drives the structural price increase. Critics point out it's a small sample size. Proponents point out that three consecutive cycles following the same pattern isn't noise.
The 365-day moving average often applied to S2F charts smooths out the volatility around halving events themselves, when the ratio changes abruptly. This gives a cleaner projection line for long-horizon analysis, at the cost of masking short-term deviations.
Bitcoin's post-2024 S2F ratio of ~113 now technically exceeds gold's ~65 - the first time in history a digital asset has been measurably scarcer than gold by this metric. Whether the market values that scarcity accordingly is what the next cycle will reveal.
Knowing how halvings mechanically drive the S2F ratio is foundational. The more interesting question for active analysts is: how do you actually read the chart?
How to Read and Use a Stock-to-Flow Chart
Most investors encounter the S2F model as a chart rather than a spreadsheet calculation. Reading it correctly requires understanding a few specific components - and most tutorials skip the practical part.
Why logarithmic scale? S2F charts almost always display price on a logarithmic (log) scale rather than linear. On a linear scale, Bitcoin's early price movements (from $0.01 to $100) would be visually invisible compared to the recent range ($20K-$100K+). Log scale gives proportional visual weight to each order-of-magnitude move, making historical cycles comparable. If you see a straight upward line on an S2F chart, that represents exponential growth - not linear.
The S2F projection line vs. actual price. The yellow or white line on most S2F charts is the model's projected price based on the current ratio. The colored dots or lines represent actual Bitcoin price. When actual price runs significantly above the projection line, the asset is "overvalued" by the model's measure. When price sits below the line, it's "undervalued." Historically, large deviations in either direction have been temporary - price tends to revert toward the model's projected range over multi-month periods.
The S2F Deflection Indicator. Some platforms (notably Bitbo) display a separate divergence chart below the main S2F chart. When price exceeds the S2F model line, the deflection indicator turns red. When price falls below, it turns green. This gives a cleaner visual signal for identifying cyclical over- and undervaluation zones without requiring you to interpret the main chart.
Halving countdown dots. Many S2F charts overlay colored dots on the price line that represent the number of days until the next halving. This overlay makes it visually apparent how price tends to behave in the lead-up to and aftermath of halving events - generally: accumulation phase pre-halving, rally phase 12-18 months post-halving, peak, correction.
Free Tools to Track the S2F Model Live
Each platform uses slightly different smoothing periods and data sources, which is why S2F ratios vary marginally across tools. The directional signal is consistent; the exact numbers aren't.
Criticism and Limitations of the Stock-to-Flow Model
Serious analysts hold the S2F model at arm's length - and for good reason. Understanding the criticisms isn't a reason to dismiss the model; it's a requirement for using it responsibly.
1. It's a supply-only model. The S2F formula has no demand variable. If institutional interest collapses, if a regulatory framework shuts down major exchanges, or if a superior digital asset emerges - the model would still project an increasing price based purely on declining supply. That's a structural limitation, not a minor caveat. Price is always determined by supply and demand; a framework that ignores one side is inherently incomplete.
2. Macro and sentiment factors are invisible to S2F. The 2022 crypto winter was the model's most damaging test. Bitcoin's S2F ratio was technically correct - hovering near 60 - while price collapsed to ~$16,000, far below the model's projected range. The FTX collapse, rising interest rates, and broader risk-off sentiment drove the divergence. None of these factors are variables in the S2F equation.
3. Historical data overfitting. Bitcoin has completed just three full post-halving cycles. Building a predictive model on three data points is statistically precarious. The observed correlation between S2F ratio and price might reflect genuine monetary adoption dynamics - or it might be a coincidence that holds until it doesn't. Ethereum co-founder Vitalik Buterin publicly described S2F-style models as harmful for giving investors a false sense of mathematical certainty about inherently unpredictable markets.
4. Prediction misses have been substantial. PlanB's original S2F model projected Bitcoin above $100,000 in 2021 and maintained that projection through 2022 when Bitcoin was trading near $16,000 - a near 85% miss at the lows. The model's defenders argue the long-term directional thesis remains intact; critics argue that a model this wrong for this long at a critical juncture shouldn't be relied upon.
The balanced view: S2F captures something real about Bitcoin's supply mechanics. It cannot capture everything that determines price. Use it accordingly.
Stock-to-Flow vs. Other Bitcoin Valuation Models
No serious analyst runs a single model. S2F is one lens - a supply-side lens - and understanding how it fits alongside demand-side and sentiment-based frameworks is what separates informed analysis from confirmation bias. For a deeper look at on-chain metrics like MVRV, the complete guide to on-chain analytics covers the full toolkit.
The Rainbow Chart plots Bitcoin's price against a logarithmic regression with color bands indicating over/undervaluation. See how the Bitcoin Rainbow Chart works in detail - it's intuitive and visually compelling, but it has no fundamental basis beyond pattern-fitting.
The MVRV Ratio (Market Value to Realized Value) compares Bitcoin's current market cap against its realized cap - the sum of all coins valued at the price they last moved on-chain. When MVRV is high, it indicates many holders are sitting on large unrealized profits and a correction is historically more likely. It's a demand-side and behavior-based signal that directly complements S2F's supply focus. According to on-chain data as of early 2026, Bitcoin's MVRV Z-Score sits at 1.32 - well below the overheated zone above 7.
The Mayer Multiple divides the current price by the 200-day moving average. Above 2.4 has historically signaled overheated conditions; below 1.0 has often coincided with undervalued accumulation zones. It's a blunt instrument but a fast one - useful for a quick cycle temperature check.
Used together: S2F for the macro supply context, MVRV for market participant behavior, Mayer Multiple for price momentum. That's a significantly more complete picture than any single model provides.
S2F vs. S2FX: What Is the Difference?
The original S2F model plots a single price projection trajectory based on the stock-to-flow ratio alone. The S2FX (Stock-to-Flow Cross-Asset) model takes a different approach: it adds market capitalization as a second variable and identifies distinct "phase clusters" in Bitcoin's historical price data.
In the S2FX framework, Bitcoin progresses through phases analogous to silver (early monetary phase), gold (store of value phase), and potentially beyond. Each phase transition corresponds to a step-change in market capitalization and price. This produces significantly higher long-term price targets than the original S2F model - and significantly more controversy, since the phase transition timing is inherently uncertain.
How to Use the Stock-to-Flow Model in Your Investment Research
S2F isn't a trading signal. Treat it like one and you'll make poor decisions. Treat it as a macro supply framework for multi-year positioning, and it starts to add genuine analytical value.
It's a long-horizon compass, not a short-term map. The S2F model operates on halving cycles - approximately 4-year intervals. Using it to time monthly trades is applying a macro instrument to a micro problem. Its signal strength is in identifying broad cycle phases: deep accumulation zones (price far below projection), expansion phases (price approaching projection), and potential overheating (price significantly above projection for extended periods).
S2F Deflection as a relative value gauge. Historically, the periods when Bitcoin traded at the largest discounts to the S2F projection line have preceded the most significant subsequent rallies. This isn't a perfect entry signal - the 2022 bear market included extended periods below the projection - but it provides context for assessing whether current prices represent structural undervaluation or overvaluation relative to supply scarcity.
Dollar-cost averaging (DCA) and halving cycle alignment. For investors with a multi-year horizon, aligning accumulation periods with post-halving scarcity ramp-ups has historically reduced average cost basis relative to lump-sum buying at cycle peaks. The 12-18 months following each halving have typically been characterized by increasing S2F ratios and gradually accelerating price appreciation.
⚠ Risk Management Reminder
- Position sizing → always account for S2F's acknowledged limitations
- 80%+ model error in 2022 → appropriate skepticism is required in portfolio construction
- No single framework → including S2F - justifies concentrated allocation
- Crypto trading involves substantial risk of loss → leveraged positions amplify both gains and losses significantly
Technical indicators for entry timing within S2F-identified zones. Once the S2F model identifies a potential undervaluation zone, technical analysis tools can help sharpen entry and exit timing. RSI (Relative Strength Index) below 30 on weekly charts has historically aligned with S2F-confirmed accumulation periods. Moving average crossovers - particularly the 50-week and 200-week MAs - provide additional confirmation signals. Bollinger Band contractions following extended consolidations have often preceded the breakout phases that the S2F model projects post-halving.
✅ S2F-Informed Research Checklist
- Check current S2F deflection: is price above, at, or below the projection line?
- Cross-reference with MVRV Ratio: are market participants in profit or loss?
- Check Mayer Multiple: is price overextended relative to the 200-day MA?
- Identify the halving cycle phase: pre-halving accumulation, post-halving expansion, or late-cycle peak?
- Assess macro conditions: are risk-on or risk-off forces dominating broader markets?
- Apply position sizing consistent with your risk tolerance - not with S2F projections
Conclusion - Is the Stock-to-Flow Model Still Relevant in 2026?
The question isn't whether S2F was right or wrong - it's whether the underlying logic still applies. And here, the case remains stronger than its critics often acknowledge.
What S2F got right over 15 years: The directional thesis - that each halving materially increases Bitcoin's scarcity, and that sustained scarcity creates structural upward price pressure over multi-year cycles - has held across three complete cycles. Bitcoin's price floor after each correction has been higher than the previous cycle's peak. That's not something most financial models predicted.
What changed the landscape: Spot Bitcoin ETFs, approved in January 2024, introduced institutional demand at scale in a way the S2F model simply cannot account for. With Spot ETFs holding an estimated $58 billion+ in BTC within their first year, demand dynamics are now less correlated with retail sentiment cycles and more tied to institutional allocation patterns. This arguably makes demand-side models more important alongside S2F - not less.
Where the model stands in 2026: Bitcoin's post-2024 halving S2F ratio of ~113-120 represents the highest scarcity level in the asset's history - measurably beyond gold. The 2026 cycle will test whether the model's projections hold at these elevated ratios, and whether institutional participation amplifies or dampens the halving-driven price dynamics.
Platforms built around self-custody and on-chain verifiability - where positions, yields, and outcomes are transparent and user-controlled - reflect the same trustless philosophy that makes S2F compelling: verifiable mechanics, no hidden variables, nothing to take on faith. That principle applies whether you're analyzing scarcity models or choosing where to trade.
The S2F model is a compass, not a GPS. Useful for orientation. Insufficient for precise navigation. Master that distinction, and it becomes a genuinely powerful tool in your analytical stack. For a broader view of what Bitcoin's distribution looks like in 2026, the analysis on how much Bitcoin puts you in the top 2% of holders adds useful context.
Crypto trading and investing involves substantial risk of loss. The stock-to-flow model is an analytical framework for informational purposes only and does not constitute financial advice. Past model accuracy does not guarantee future performance. Always conduct your own research before making any investment decisions.
Last updated: April 2026.
Frequently Asked Questions
What is the stock to flow model in simple terms?
The stock-to-flow model measures how scarce an asset is by dividing its total existing supply (stock) by how much new supply is produced each year (flow). The ratio tells you how many years of current production would be required to replicate the existing stock. A higher ratio means greater scarcity. Gold has a ratio of ~65; Bitcoin post-2024 halving is approximately 113-120. The model's thesis is that greater scarcity, over long time periods, correlates with higher market value - making it a useful macro framework for understanding Bitcoin's long-term price trajectory.
Who invented the stock to flow model for Bitcoin?
The S2F model applied to Bitcoin was created by a pseudonymous Dutch analyst known as PlanB, operating under the handle @100trillionUSD. He published his original research in a 2019 Medium article titled "Modeling Bitcoin's Value with Scarcity." PlanB's background is in quantitative finance and institutional investment - over 25 years of experience. His anonymity is deliberate; he has confirmed being a Dutch institutional investor without further identifying details. His work built on earlier research by Saifedean Ammous on Bitcoin as a hard money asset.
How does Bitcoin halving affect the stock to flow model?
Each Bitcoin halving cuts the block reward - and therefore the annual flow - by exactly 50%. With flow halved while stock continues to grow, the S2F ratio approximately doubles post-halving. The 2020 halving pushed the ratio from ~26 to ~56; the 2024 halving pushed it from ~56 to ~113-120. The S2F model interprets this as a mechanically-driven scarcity event that structurally increases Bitcoin's value proposition. Halvings are pre-programmed to occur every 210,000 blocks - making them the only major supply shock in financial history that can be predicted with near-certainty years ahead of time.
Has the stock to flow model ever been wrong?
Yes - and significantly so during the 2022 bear market. Bitcoin traded as low as ~$15,600 in November 2022, while the S2F model projected prices north of $100,000 - a divergence exceeding 80% at the lows. The model also missed the 2018 bear market depth. Proponents argue these deviations were temporary and the long-term directional trend remains valid; critics point out that being wrong by 80% for 12+ months is a substantial failure for a model presented as predictive. The honest assessment: S2F captures supply-side scarcity accurately; it cannot capture demand destruction, regulatory shocks, or macro crises.
What are the main limitations of the S2F model?
Four limitations are consistently cited: first, it's supply-only - demand destruction can overwhelm any scarcity signal in the short to medium term. Second, it ignores macro factors: interest rates, regulation, exchange collapses, and institutional risk-off behavior are entirely outside the model's scope. Third, it's built on limited historical data - three halving cycles is an insufficient sample for high-confidence statistical inference. Fourth, its predictions have been materially wrong for extended periods. Using it as one component in a multi-model analytical framework is reasonable; treating it as a standalone price oracle is not.
How does Bitcoin compare to gold in stock to flow ratio?
Post-2024 halving, Bitcoin's S2F ratio of ~113-120 exceeds gold's ~65 - meaning Bitcoin is now mathematically scarcer than gold by this metric. Gold's ratio has been stable around 60-65 for decades, limited by the fact that above-ground gold stocks grow slowly but consistently. Bitcoin's ratio, by contrast, follows a programmatic step-function: it approximately doubles every four years with each halving, progressing toward theoretical infinity as the 21 million BTC supply limit approaches. The final Bitcoin isn't expected to be mined until approximately 2140.
Is the stock to flow model still relevant after spot Bitcoin ETF approval?
Spot Bitcoin ETFs, approved in January 2024 and collectively managing tens of billions in AUM within their first year, introduced a demand variable that S2F cannot model. Institutional allocation decisions and ETF-driven demand cycles operate on timelines entirely separate from Bitcoin's supply schedule. ETF approval arguably strengthens the long-term S2F thesis by bringing sustained institutional demand to a supply-constrained asset - but it makes the model less sufficient as a standalone framework. S2F remains relevant for supply mechanics analysis; it requires demand-side supplements more than ever.
