What is the stock to flow model?

In simple terms, the Stock to Flow (SF or S2F) model is a way to measure the abundance of a particular resource. The Stock to Flow ratio is the amount of a resource held in reserves divided by the amount it is produced annually. The Stock to Flow model is generally applied to natural resources. Let’s take the example of gold.

What is stock to flow & how does it work?

Stock to flow is a forecasting tool for Bitcoin price. It creates a line on the chart above that shows an estimated price level based on the number of bitcoins available in the market relative to the amount being produced (mined) each year. The score on the stock to flow line is the forecasted price for bitcoin at that particular time.

What is stock-to-flow (S2F)?

Stock-to-flow model is a technique to arrive at this value by considering the current supplies and the rate of future production. In the crypto realm, S2F can be applied to all the assets that derive their value from scarcity, with Bitcoin being the OG player. Bitcoin is designed in a way that its supply keeps on decreasing.

What is a stock-to-flow chart?

The Stock to flow chart is used by many people to try and predict the future price of Bitcoin. The stock-to-flow line is an estimated future price point for $BTC. The Stock-to-flow chart predicts that the price of Bitcoin on 31st December 2022 will be $78,280. Its Bitcoin price prediction for 1 year later on the 31st December 2023 is $81,956.