⏳ Stock-to-Flow S2F
A way to measure how scarce something is: take how much of it already exists (the stock) and divide by how much new supply shows up each year (the flow). A bigger number means it is harder to dilute.
🧮 The simple version — a lake and a stream
Picture a lake fed by one small stream. The lake is the stock: everything that already exists. The stream is the flow: the new supply added each year. Divide the lake by the stream and you get the Stock-to-Flow ratio. If the stream only adds a trickle next to a huge lake, the level stays steady and the thing is hard to dilute. A firehose pouring in would water it down fast. So a high ratio means scarce, a low ratio means supply grows quickly.
📐 The formula is just S2F = total existing supply ÷ new supply per year. Another way to read it: how many years of current output would it take to recreate everything that already exists?
🥇 Where it came from — measuring gold
S2F started as a way to compare commodities like gold and silver. Roughly 185,000 tonnes of gold have been mined over history, and miners add only about 3,000 tonnes a year. That gives gold a ratio near 62 — it would take about 60 years of mining to dig up everything that already exists. That slow, steady flow is a big reason gold built its reputation as a store of value.
₿ How Bitcoin enters the story
Bitcoin has a fixed supply schedule written into its code: it stops at 21 million coins, and a Bitcoin halving cuts the reward for new blocks in half every 210,000 blocks (about every four years). Cutting the new flow in half while the stock keeps growing means Bitcoin's ratio roughly doubles at each halving.
| Moment | Approximate S2F |
|---|---|
| Bitcoin before the 2020 halving | about 27 |
| Bitcoin after the 2020 halving | about 56 (passed gold for the first time) |
| Gold (benchmark) | about 62 |
In a March 2019 article, a pseudonymous analyst known as PlanB applied S2F to Bitcoin and built a price model around it (roughly price ≈ 0.18 × S2F3.3). It was a backward-looking fit that lined up with past prices, not a proof of anything.
🚨 Why the model broke — and what S2F can't do
S2F measures one thing: how fast new supply arrives. It says nothing about demand — adoption, regulation, big buyers, or the overall mood of the market. That blind spot showed up plainly. The Bitcoin S2F model pointed to six-figure prices, while Bitcoin actually fell to around $16,000 in the 2022 downturn, and price kept drifting away from the model afterward.
- 📉 It ignores demand — scarcity alone does not set a price; buyers do
- 🎯 It is backward-looking — a curve fitted to past data, not a guarantee about the future
- 🧪 Experts pushed back — Ethereum co-founder Vitalik Buterin warned in 2022 that models giving a false sense of certainty are harmful, and statisticians flag the math as a shaky correlation
- 🚫 Not a buy signal — treat any chart that promises a future price as a story, not a fact
❓ FAQ
- Does Stock-to-Flow predict a coin's price?
- No. S2F only measures supply scarcity. It says nothing about demand — adoption, regulation, or how the wider market feels. A famous Bitcoin S2F price model tracked closely for a while, then missed badly: it pointed to six figures while Bitcoin fell to around $16,000 in 2022.
- Why is gold's Stock-to-Flow so high?
- Roughly 185,000 tonnes of gold have already been mined, while only about 3,000 tonnes are dug up each year. Dividing the first by the second gives a ratio near 62 — it would take about 60 years of mining to dig up everything that already exists, which is why gold is hard to dilute.
- Why does Bitcoin's Stock-to-Flow jump every four years?
- Every 210,000 blocks — roughly every four years — Bitcoin's halving cuts the reward for new blocks in half. That halves the yearly flow of new coins while the existing stock keeps growing, so the ratio roughly doubles at each halving.