The bitcoin Stock to Flow (S2F) ratio is a data-driven model that’s become the holy grail for predicting BTC’s price trajectory. Backed by rigorous research and a track record of accuracy, this metric reveals why bitcoin is poised to dominate the global monetary hierarchy.
Understanding the Bitcoin Stock to Flow Ratio
The bitcoin stock to flow ratio measures the relationship between bitcoin’s existing supply (stock) and its annual production (flow). Stock refers to the total number of BTC in circulation (20 million as of today), while flow is the new supply mined yearly (~328,500 BTC post-2024 halving). The ratio is calculated as:
S2F = Stock / Flow 
A higher S2F indicates greater scarcity. Gold’s S2F is ~62, bitcoin’s post-2024 halving S2F rocketed to ~112, making it the scarcest asset in human history. This programmed scarcity, enforced by halvings every four years, is why analysts argue bitcoin’s value will soar as its flow dwindles.
PlanB’s Groundbreaking Bitcoin Stock to Flow Research
The bitcoin stock to flow model gained prominence in 2019 when pseudonymous analyst PlanB published a seminal article titled “Modeling Bitcoin’s Value with Scarcity.” Using historical data, PlanB demonstrated a near-perfect correlation (R² = 0.95) between bitcoin’s S2F ratio and its market value.
For instance, after the 2012 halving (S2F rising from 10 to 25), bitcoin’s price surged from $12 to $1,100. Post-2016 halving (S2F 25 to 50), BTC rallied from $650 to $20,000. PlanB’s model predicted bitcoin would reach $55,000 post-2020 halving (S2F 50 to 112)—a forecast validated when BTC hit $69,000 in 2021.
PlanB’s updated stock-to-flow cross-asset model further showed Bitcoin’s S2F dominance over gold and silver, stating: “Bitcoin is the first asset that is scarce in both dimensions: absolutely (like gold) and in rate of change (unlike gold).”
The Halving Effect and Historical Performance
Every four years, bitcoin’s halving events slash mining rewards by 50%, throttling new supply and boosting the bitcoin stock to flow ratio. This deflationary mechanism has triggered parabolic bull cycles:
- 2012 Halving: S2F rose to 25; price +9,000% in 12 months.
- 2016 Halving: S2F doubled to 50; price +3,000% in 18 months.
- 2020 Halving: S2F hit 112; price surged 600% to all-time highs.
The 2024 halving reduced flow to ~0.8% of the total supply annually, cementing bitcoin’s scarcity premium. Analysts like Robert Breedlove argue this “quantitative hardening” makes bitcoin superior to central bank-manipulated fiat currencies.
Criticisms and Counterarguments
Critics claim the bitcoin stock to flow model oversimplifies price drivers, ignoring factors like regulation or adoption. The 2021 bear market, where BTC fell 80% from its S2F-predicted highs, fueled skepticism. However, PlanB countered that short-term volatility doesn’t invalidate long-term trends.
Notably, the model’s accuracy over multi-year horizons remains intact. A study by institutional platform Ecoinometrics reaffirmed that bitcoin’s price consistently trends toward its S2F value, calling deviations “temporary noise.”
Why the Bitcoin Stock to Flow Model Matters
For investors, the bitcoin stock to flow ratio serves as a strategic compass. Historical data suggests buying BTC 6–12 months pre-halving and holding through the subsequent cycle yields exponential returns. For example:
- Investors who bought before the 2020 halving saw gains exceeding 600% by late 2021.
- Post-2024 halving, the S2F ratio implies a price floor of $500,000 per BTC by 2028, according to PlanB’s updated projections.
Moreover, institutions like MicroStrategy and Tesla now treat bitcoin as a treasury reserve asset, mirroring the S2F thesis that scarcity drives long-term appreciation.
The bitcoin stock to flow ratio isn’t just a model—it’s a mathematical testament to bitcoin’s unyielding scarcity. With each halving, BTC evolves into a harder, rarer asset, poised to outperform inflationary stocks, bonds, and commodities.
