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.

Indicator Overview

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.

How is it measured?

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).

About

Introduced By

PlanB

Date Introduced

January 2019

Further Resources

PlanB - Modeling Bitcoin's Value with Scarcity