What it is
The stock-to-flow (S2F) model calculates an asset's scarcity by dividing its current circulating supply ("stock") by the amount produced annually ("flow"). For Bitcoin, the stock is the total mined supply, and the flow is the new bitcoins created through mining each year. The model posits that scarcer assets, like gold or silver, tend to have higher valuations, and it applies this principle to Bitcoin's programmatically limited supply and predictable halving events.
The S2F model gained prominence for its historical correlation with Bitcoin's price, particularly around halving events, which drastically reduce the "flow" of new bitcoins. The model projects a significantly higher price for Bitcoin post-halving due to increased scarcity. While influential, the model is also subject to criticism regarding its assumptions and ability to predict future prices accurately, as market dynamics involve more than just supply scarcity.
Why it matters
Understanding the S2F model helps retail investors grasp a popular, albeit controversial, framework for Bitcoin price predictions, particularly concerning the impact of scarcity and halvings.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice