Bitcoin Stock-to-Flow Model: Historical Accuracy Tracker

What Is the Stock-to-Flow Model?

The stock-to-flow (S2F) model measures an asset's scarcity by dividing its total existing supply (stock) by its annual production rate (flow). A higher ratio means the asset takes longer to replace through new production, implying greater scarcity. The concept originates from commodity analysis: gold has an S2F ratio of roughly 60 to 66, meaning it would take over 60 years of current mining output to reproduce the existing above-ground supply. Silver sits at approximately 22.

In March 2019, pseudonymous analyst PlanB published "Modeling Bitcoin's Value with Scarcity" on Medium, applying S2F to Bitcoin. The model regressed Bitcoin's market capitalization against its S2F ratio and reported an R-squared of 0.95, suggesting that scarcity alone explained 95% of Bitcoin's historical price variation. The core formula: Market Value = exp(14.6) × SF^3.3.

Bitcoin's S2F ratio increases predictably because the halving cuts the block subsidy in half roughly every four years. After the April 2024 halving reduced the reward to 3.125 BTC per block, Bitcoin's S2F ratio jumped from approximately 57 to around 120, making it roughly twice as "scarce" as gold by this metric. The model's appeal was straightforward: if scarcity drives value and halvings increase scarcity on a fixed schedule, future price increases should be predictable.

S2F Predictions vs. Actual Price by Halving Era

The following table tracks how the S2F model's predictions have compared to actual Bitcoin prices across each emission schedule era. Note that the model was published in 2019, so Eras 1 and 2 represent retroactive fit rather than forward predictions. For more on halving economics, see our Bitcoin halving economics analysis.

Era 4 was the model's first real out-of-sample test. The S2FX cross-asset variant predicted a fair value of roughly $288,000 per bitcoin by the end of the cycle. The actual cycle peak of $69,000 in November 2021 fell dramatically short. Bitcoin subsequently crashed below $16,000 in late 2022 before recovering to $126,000 in October 2025. Even that recovery represents less than half of the S2FX target.

You can track the current supply schedule and time until the next halving on our halving countdown and supply calculator tools.

The S2FX Cross-Asset Model

In April 2020, PlanB published a follow-up: the Stock-to-Flow Cross-Asset (S2FX) model. Rather than plotting Bitcoin's price against its own S2F over time, S2FX incorporated gold and silver as additional data points. The model claimed a 99.7% fit across all three assets and identified distinct Bitcoin "phases" corresponding to different use case narratives.

S2FX grouped Bitcoin's history into phases: proof of concept (S2F ~1.3, market value ~$1M), payments (S2F ~3.3, ~$58M), e-gold (S2F ~10, ~$5.6B), and financial asset (S2F ~25, ~$114B). Extrapolating to the current S2F of ~120, S2FX projected a market value of $5.5 trillion, translating to roughly $288,000 per bitcoin. This prediction has not materialized: as of mid-2026, Bitcoin's market cap sits well below $2 trillion.

Major Criticisms and Statistical Flaws

The S2F model attracted intense academic and practitioner criticism. The objections go beyond "the price didn't reach the target" and strike at the model's statistical foundations.

Spurious Correlation

Nick Blow and Eric Wall demonstrated that because the S2F model regresses market capitalization (price multiplied by supply) against stock-to-flow (supply divided by flow), it effectively regresses "stock" on itself. Supply appears on both sides of the equation, inflating the apparent R-squared. Blow showed that the number of bitcoins in circulation alone is equally correlated with market cap, suggesting the relationship is mathematical artifact rather than economic insight.

Cointegration Failures

PlanB and supporters initially claimed that cointegration tests proved a long-run relationship between S2F and price. Multiple researchers debunked this. Marcel Burger published "The Fall of Cointegration," showing the original tests were improperly applied. Econometrics professor Sebastian Kripfganz (University of Exeter) found that the ARDL-based cointegration test used was invalid for this specification and that no statistical evidence for an S2F-price relationship survived proper methodology. When autocorrelation in residuals was accounted for, the S2F coefficient dropped to nearly zero.

Time Trend Confounding

A 2024 peer-reviewed study (Shelton, arXiv:2606.00071) found that S2F's in-sample explanatory power is confounded with a simple logarithmic time trend. The research reported that 80.57% of S2F's apparent correlation is attributable to the deterministic passage of time. When time fixed-effects are introduced, the significance of S2F disappears. In out-of-sample testing, the S2F model failed to outperform a naive "today's price" forecast at one-to-six-month horizons.

Demand Blindness

The S2F model contains no demand variable. It assumes that supply scarcity alone determines price, ignoring regulatory changes, macroeconomic conditions, institutional adoption, liquidity flows, and market sentiment. Nico Cordeiro, CIO of Strix Leviathan, argued that the model amounts to "math-laden marketing" because it cherry-picks gold and silver as supporting data points while ignoring the 50 years of gold S2F data that show no relationship between gold's S2F variations and its market value.

Why S2F Remains Popular Despite Its Flaws

Despite academic consensus that S2F lacks predictive validity, the model retains a large following. Several factors explain its persistence.

The scarcity narrative resonates intuitively. Bitcoin's fixed 21 million supply cap and predictable emission schedule are genuinely unique properties. The S2F model gave this narrative a quantitative framework, complete with charts and price targets, that was easy to share and understand.

The model's retroactive fit to 2009 through 2019 data was genuinely impressive visually. Price appeared to cluster around the S2F line across multiple orders of magnitude. This visual pattern was more compelling than disclaimers about in-sample overfitting.

S2F also benefits from a large confirmation bias window. Its predictions span full four-year cycles, and the model uses logarithmic scales where deviations of 2x to 3x look small on the chart. This allows supporters to claim the model is "roughly correct" even when prices miss targets by hundreds of percent.

Alternative Bitcoin Valuation Models

Several alternative frameworks attempt to model Bitcoin's long-term value trajectory without S2F's methodological issues. None should be treated as reliable price predictors: all carry their own limitations.

The Power Law model, proposed by physicist Giovanni Santostasi in 2015 and formalized as Price = A × Days^n, has gained traction as an alternative to S2F. It interprets Bitcoin's growth as analogous to natural scaling phenomena (like city growth) rather than commodity scarcity. Its projections are more conservative than S2F and avoid the absurd terminal values (S2F eventually implies hundreds of billions per bitcoin) that undermine the scarcity model's credibility. However, the Power Law model has its own fundamental limitation: it is a pure time-based curve fit with no economic mechanism.

For a visual approach to Bitcoin's price trajectory, see our Bitcoin Rainbow Chart.

What S2F Gets Right About Bitcoin

Dismissing the S2F model entirely would miss what it correctly highlighted. Bitcoin's supply schedule is genuinely unprecedented in monetary history. No other asset has a mathematically enforced, publicly verifiable, and permanently declining issuance rate. The difficulty adjustment ensures that increased hashrate cannot accelerate production, a property that distinguishes Bitcoin from every mined commodity.

The S2F framework also correctly predicted the directional impact of halvings: each halving era has coincided with a significant price increase, even if the magnitudes did not match the model's specific targets. The circulating supply now exceeds 19.7 million of the 21 million total, and annual issuance has fallen below 1% of existing supply, making Bitcoin's supply dynamics genuinely comparable to or tighter than gold.

The lesson is that scarcity matters as a narrative and as a supply-side constraint, but it does not mechanistically determine price. Demand, regulation, macroeconomic conditions, and competing assets all shape price formation in ways that no single-variable model can capture.

S2F Ratio Comparison: Bitcoin vs. Traditional Assets

Bitcoin's S2F ratio of ~120 after the 2024 halving exceeds gold's by roughly 2x. However, comparing ratios across asset classes obscures important differences. Gold has millennia of monetary history and deep industrial demand. Silver's lower S2F partly reflects its industrial consumption, which reduces effective stock. Bitcoin has no industrial use case: its value is entirely derived from monetary and speculative demand, which makes simple S2F comparisons misleading.

Frequently Asked Questions

Is the Bitcoin stock-to-flow model accurate?

The S2F model fit historical data well through 2019 (when it was published), but its first real forward prediction failed significantly. The model projected $100,000 to $288,000 for the 2020 to 2024 cycle, while the actual peak was approximately $69,000. Academic research (Shelton 2024) found that S2F has "limited to no ability" to predict prices out-of-sample and that its apparent accuracy is confounded with a simple time trend.

What is Bitcoin's current stock-to-flow ratio?

After the April 2024 halving, Bitcoin's S2F ratio approximately doubled from ~57 to ~120. This reflects the reduction in block subsidy from 6.25 to 3.125 BTC per block. With roughly 450 BTC mined daily (~164,000 per year) and over 19.7 million BTC in existence, Bitcoin's S2F now exceeds gold's. The next halving in 2028 will push it to approximately 240.

Why did the stock-to-flow model fail?

Multiple independent analyses identified fundamental statistical flaws. The model regresses "stock" on itself (supply appears on both sides of the equation), creating spurious correlation. Cointegration tests originally cited as proof were invalidated by proper econometric methodology. The model also ignores demand entirely: it assumes scarcity alone determines price, with no variable for adoption, regulation, macroeconomic conditions, or competing assets.

What is the stock-to-flow cross-asset model (S2FX)?

S2FX is PlanB's 2020 extension that incorporates gold and silver alongside Bitcoin to create a cross-asset scarcity model. It claimed a 99.7% fit and predicted a $5.5 trillion market cap (~$288,000 per BTC) for the current halving era. The model divided Bitcoin's history into narrative "phases" (proof of concept, payments, e-gold, financial asset). Like the original S2F, S2FX has significantly overestimated prices in its out-of-sample period.

What are better alternatives to the stock-to-flow model?

No single model reliably predicts Bitcoin's price. The Power Law model (Santostasi, 2015) offers more conservative projections without absurd terminal values. Metcalfe's Law models incorporate demand-side data through active address counts. The NVT ratio provides on-chain valuation signals. Each has limitations: the Power Law is a pure time fit, Metcalfe's Law struggles with noisy address data, and NVT is backward-looking. Combining multiple frameworks provides more context than relying on any single model.

How does Bitcoin's halving affect the stock-to-flow ratio?

Each halving cuts the block subsidy in half, which halves annual production and approximately doubles the S2F ratio. The 2024 halving increased Bitcoin's S2F from ~57 to ~120. The 2028 halving will push it to ~240, and the 2032 halving to ~480. In theory, S2F approaches infinity as the block subsidy approaches zero (the last bitcoin will be mined around 2140). Track the countdown on our halving countdown tool.

Does scarcity make Bitcoin more valuable?

Scarcity is a necessary but not sufficient condition for value. Many things are scarce but worthless. Bitcoin's fixed supply cap and declining issuance create a credible monetary policy that distinguishes it from fiat currencies and even gold (whose production responds to price incentives). However, Bitcoin's price is ultimately set by the intersection of this fixed supply with variable demand. The S2F model's error was treating scarcity as both necessary and sufficient.

This tool is for informational purposes only and does not constitute financial advice. The stock-to-flow model and alternative valuation models discussed here are analytical frameworks, not reliable price predictors. Historical price data is approximate and sourced from publicly available market records. Always conduct your own research before making investment decisions.