The Stock-to-Flow (S2F) model is a powerful conceptual tool used to understand Bitcoin’s scarcity-driven value. By comparing the existing supply of Bitcoin to its new production rate, S2F helps explain long-term price trends — especially in the context of Bitcoin halvings. While it’s not a perfect predictor, the model remains influential in crypto valuation discussions. Users should apply it alongside other tools and maintain a balanced, security-minded approach to investing in Bitcoin and other digital assets.
Q1: What does the Stock-to-Flow (S2F) model primarily measure?
A1: Asset scarcity by comparing existing supply to production rate
Q2: Which event directly increases Bitcoin’s S2F ratio?
A2: Bitcoin halving
Q3: What is one benefit of using the S2F model as a long-term investor?
A3: It helps understand Bitcoin's scarcity and monetary design
Q4: What typically happens to the flow part of the S2F formula after a Bitcoin halving?
A4: It gets cut in half
