Bitcoin Stock-to-Flow Ratio: What It Is & Why It Matters

Few valuation models have generated as much debate in Bitcoin’s history as the Stock-to-Flow (S2F) framework. When pseudonymous analyst PlanB adapted and popularized the framework in 2019 for Bitcoin, it gained significant traction in both crypto and mainstream financial media. The model has been polarizing ever since.

The Stock-to-Flow model is a ratio used to measure the scarcity of a commodity, such as cryptocurrencies or precious metals. PlanB used the ratio to argue that Bitcoin’s scarcity is one of the primary drivers of its long-term value, and that it correlates with price via a power-law relationship. Even critics of the S2F model tend to agree it captures an essential aspect of Bitcoin, which is its scarcity.

Read on to learn more about the Bitcoin Stock-to-Flow and how analysts are using it to evaluate Bitcoin. 

TL;DR

• The Stock-to-Flow is a model that measures an asset's scarcity by dividing its current supply (stock) by the new supply entering circulation each year (flow).
• Pseudonymous analyst PlanB adapted and popularized the framework for Bitcoin in 2019.

What Is Stock-to-Flow?

Stock-to-Flow is a model that measures an asset's scarcity by dividing its current supply (stock) by the new supply entering circulation each year (flow). The formula is simple:

S2F = Current Stock ÷ Annual Flow

The resulting S2F ratio tells you how many years, at current production rates, it would take to produce enough new supply to add to the existing stock meaningfully. 

The higher the Stock-to-Flow ratio, the scarcer the asset is. For decades, commodities traders have used this framework for precious metals like gold and silver because it offers a rough proxy for how resistant an asset or commodity is to inflation from new supply. 

For reference, S2F stacks up differently across various asset classes:

• Gold: ~62
• Silver: ~22
• Bitcoin (post-April 2024 halving): ~119
• Bitcoin (post-2028 halving): ~238 projected

The above is as referenced in PlanB’s 2019 original paper. This matters because scarcity is a foundational driver of long-term store-of-value pricing. 

In the case of Bitcoin specifically, its ratio is mechanically engineered to keep rising. Every Bitcoin halving event reduces new BTC circulation by half and is also important for its Stock-to-Flow. No other commodity (gold included) has a similar built-in mechanism to increase scarcity on a fixed, predictable schedule.

How Does the Stock-to-Flow Model Apply to Bitcoin?

Bitcoin was designed with scarcity embedded in its code. Its total supply is capped at 21 million BTC, which is a limit that no single entity can alter. New BTC enter circulation through mining, and miners are rewarded with newly mined BTC for validating transactions, which are added to the blockchain. 

Source: Block Horizon

However, the reward isn’t constant. Roughly every four years, a pre-programmed event known as Bitcoin halving reduces the block reward by 50%, decreasing the rate at which new BTC supply is created. 

postBecause a halving cuts the flow in half while the stock stays put, each event doubles the Stock-to-Flow ratio overnight, and the ratio keeps climbing between halvings as new coins accumulate ever more slowly. 

Every previous Bitcoin halving event has been followed by a significant bull market within 12 to 18 months but, of course, past performance does never guarantee future returns. 

PlanB’s Bitcoin Stock-to-Flow Model

In March 2019, a pseudonymous investor, PlanB, published “Modeling Bitcoin’s Value with Scarcity” on Medium, introducing and popularizing the Stock-to-Flow framework in the crypto space. 

Source: Medium.com PlanB

PlanB’s core claim was that Bitcoin’s price is a function of its S2F ratio, with each halving creating predictable phase transitions in scarcity, and consequently, in price. 

The original model fit historical price data with an R-squared of approximately 95%, although critics argue this reflects statistical overfitting rather than predictive power. The model projected an average valuation around $55,000 during the post-2020 halving period. In the 2020 - 2024 cycle, this came true as BTC surpassed the predicted $55,000 price point. 

In April 2020, PlanB refined the model into S2FX (Stock-to-Flow Cross Asset model), adding cross-asset phase transitions. In it, he used a regression analysis to build the S2FX model, adding gold and silver S2F and market data in the regression analysis. The S2FX model showed a major relationship between S2F and the market value of the different assets, with a 99.7% R-squared correlation. 

Source: Medium.com PlanB

Using the S2FX, PlanB predicted that Bitcoin’s price during the 2024 - 2028 price cycles would average $100K - $288K given the number of BTC in circulation. However, current prices remain materially below much of the S2FX projected range.

What made the Stock-to-Flow ratio capture the market’s imagination wasn’t just the predictions. It was the simplicity of the formula, which resulted in a near-perfect statistical fit that was math-based and testable. It gave traders something solid to rally around in a market that’s largely driven by speculation. 

How Bitcoin Compares to Gold and Silver

Below is a quick table that shows how Bitcoin compares to gold and silver.

The implication PlanB drew from the table above was simple: if Bitcoin reaches a Stock-to-Flow ratio higher than gold's, then its market cap should eventually approach or exceed gold’s. 

However, the counter-argument has been historical. Gold and silver have about 5,000 years of monetary history behind them. Moreover, gold is entrenched in central bank reserves, industrial use across virtually every civilization, and cultural tradition. Bitcoin has only existed for 16 years as of 2026. Therefore, scarcity alone doesn’t equal value. 

The Bitcoin investor’s view, though, is that Bitcoin’s supply schedule is fixed in code, with every block reward, halving event, and total coins already known in advance. This is unlike gold, whose supply schedule depends on geology, mining discoveries, and recycling, since nobody knows exactly how much of it remains underground. 

The Limitations and Criticisms of the S2F Model

Despite S2F’s popularity, the model has some notable limitations and criticisms. For starters, the most basic critique of the model is its overreliance on scarcity. 

The model assumes scarcity is the only price driver and ignores the complexities of Bitcoin’s value dynamics, such as adoption rates, ETF flows, macro events, and the regulatory environment, which all contribute to Bitcoin’s overall demand and market valuation. A model that relies on a single input will always struggle in a market shaped by many.

The model’s biggest failure was in 2022, when PlanB on X (formerly Twitter) predicted that BTC would hit $100,000 by the end of 2021. The coin peaked at around $68,000 in November 2021 before collapsing to roughly $16,000 in November 2022. The model has yet to visibly re-fit since then. 

Moreover, the model’s statistical foundation has also been widely challenged. Strix Leviathan's Nico Cordeiro argued that because Stock-to-Flow’s model regresses market capitalization against S2F, it essentially regresses ‘stock’ on itself, thus producing a high R-squared that reflects spurious correlation instead of a causal relationship. Ethereum’s co-founder, Vitalik Buterin, also criticized the framework for providing false price “certainty”. 

Moreover, the model lacks a mechanism for demand-side shocks, which is a significant limitation for any framework that prices an asset.

Bitcoin investors tend to treat the Stock-to-Flow ratio as one of several cycle frameworks to keep an eye on, but not as a go-to price prediction model. 

While the directional signal has held up over the years, its specific price predictions have missed the mark on several occasions. For example, the original S2F model predicted BTC would reach $100,000 by the end of 2021, but it didn’t, while S2FX’s projection of $288,000 for the current cycle is yet to materialize.  

The Takeaway

Scarcity is one of Bitcoin’s most fundamental properties, given that it’s a hard, mathematically defined supply schedule that not many other assets have. However, it’s not the whole story, and scarcity alone doesn’t determine Bitcoin’s price. 

For another way to think about Bitcoin’s monetary properties, you can check out Samara’s Bitcoin Consumer Price Index (BTCCPI), which measures how much the value of the basket of goods used for the official CPI data in Europe and the United States has changed over time if priced in Bitcoin (BTC).

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Frequently Asked Questions

What is Bitcoin's stock-to-flow ratio right now? 

As of 2026, Bitcoin’s stock-to-flow ratio is approximately 119, having remained unchanged since the April 2024 halving event. This makes BTC more scarce than gold, at least by this measure. The ratio is expected to remain fixed at ~119 until the next halving event expected in 2028. 

Is the Stock-to-Flow model accurate? 

The model's accuracy has been mixed since 2021, and its price predictions have diverged significantly from reality since late 2021. Its directional signal about halving-driven supply shocks has held up, but its specific price targets are widely considered unreliable.

What is the difference between S2F and S2FX? 

S2F is PlanB’s original 2019 model that calculates BTC’s scarcity by dividing its current supply (stock) by the new supply entering circulation each year (flow). S2FX is an extension of the original Stock-to-Flow model, published in April 2020, and incorporates phase transitions between Bitcoin and other monetary assets (silver and gold). PlanB published it in April 2020.

How does the Bitcoin halving affect Stock-to-Flow?

Each Bitcoin halving event cuts new BTC issuance in half roughly every four years, which roughly doubles the stock-to-flow ratio. Since S2F is calculated by dividing current supply by new annual issuance, halving events roughly double the ratio. The 2024 halving roughly doubled S2F from ~58 to ~119.

‍Disclaimer: None of the information in this article should be considered investment advice. Investors should consult their financial advisors to determine if any of the financial products and services mentioned in this article are a potential fit for their portfolios or not.

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