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Author: Admin | 2025-04-28
The stock to flow model is a popular metric used by some analysts to try and forecast the future price of Bitcoin. According to twitter pseudonym ‘Plan B’ who popularized the model, it’s been for the most part accurate within reason in its Bitcoin price predictions.What is the Bitcoin Stock To Flow Model Chart?The Bitcoin Stock to Flow Model is a popular Bitcoin forecasting metric that measures Bitcoin’s current stock against the rate of production or the total amount mined over the course of a year. Stock-to-flow compares abundance or scarcity of Bitcoin. The model is also applicable to other scarce commodities like gold and platinum and even more abundant commodities like oil.Stock refers to the total amount of an asset, whereas flow refers to the amount produced or mined per year. We can calculate the Stock-to-Flow ratio using these two metric (stock and flow) and dividing the stock by the flow. The higher the stock to flow ratio, the less new supply enters the market relative to the total supply. Assets with higher Stock-to-Flow ratios theoretically retain their value well over time.Bitcoin is a perfect asset for measurement with the stock-to-flow ratio. Bitcoin is scarce in that only 21 million Bitcoins will ever be mined and it is relatively costly to mine or produce Bitcoin. This number is likely even lower as many Bitcoins have already been lost. Bitcoin also has “halvings” where the amount of new supply entering the system is halved every 210,00 blocks or roughly every 4 years. According to crypto enthusiasts, these properties combined with several others make up a scarce digital asset that is likely to retain and significantly increase in value over time due to an increasing reduction in the Stock to Flow ratio.As Bitcoin has a maximum supply of only 21 million
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