What is the stock-to-flow model?

The stock-to-flow model is commonly used to price commodities. As its name suggests, the model assesses two attributes: stock and flow. Stock is the total existing supply of a commodity—or a cryptocurrency like Bitcoin. Flow is the new supply of the commodity or crypto that is created each year.

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 does stock-to-flow mean?

The 'Stock-to-flow' is a number that shows how many years, at the current production rate, are required to achieve the current stock. The higher the number, the higher the price. Why does this chart use a 463 day time span?

How accurate is the stock-to-flow model for bitcoin?

The stock-to-flow model’s predictive ability for Bitcoin has proven accuracy over the years. As Bitcoin rocketed upward during the pandemic, the model gained much traction online due to its past accuracy.