Stock to Flow Ratio
The Stock to Flow Ratio is a model of scarcity which can be applied to predict the future price of an asset.
The Stock to Flow (S/F) Ratio is a popular model that assumes that scarcity drives value. It is defined as the ratio of the current stock of a commodity and the flow of new production, and is applied across many asset classes.
Bitcoin's price has historically followed the S/F Ratio, making it a popular model for predicting future Bitcoin valuations.
Stock to Flow is defined as the ratio of the current stock of a commodity (i.e. circulating Bitcoin supply) and the flow of new production (i.e. newly mined bitcoins).