S2F

Stock-to-flow (S2F) is a metric that expresses scarcity by dividing the existing stock of an asset by its annual production (flow). A higher S2F indicates greater scarcity and, historically, a higher implied value for commodities and other scarce assets.

In Bitcoin, stock equals circulating supply and flow equals new coins mined per year. Because Bitcoin’s issuance is governed by protocol and halving events cut block rewards roughly every four years, Bitcoin’s S2F increases over time, reflecting rising scarcity.

The S2F model popularized for Bitcoin was proposed by an anonymous analyst known as PlanB. It posits a relationship between Bitcoin’s price and its stock-to-flow ratio, typically described through a log-linear association. The model argues that scarcity can help explain major price movements and long-run valuations. An extension called the S2F cross-asset (S2FX) model broadens the framework to compare Bitcoin with other scarce assets, placing it in a broader scarcity-driven context.

Criticism of S2F focuses on methodological and practical considerations. It is largely correlational and relies on historical data, which means it may not capture changing demand, macroeconomic conditions, regulatory developments, or market maturity. Some researchers argue the model risks overfitting or serving as a narrative rather than a robust predictive tool. Despite criticisms, S2F remains a widely discussed heuristic in cryptocurrency analysis, used to frame discussions of Bitcoin’s scarcity and its valuation relative to traditional stores of value.