The Stock-to-Flow (S2F) model is a Bitcoin price prediction framework popularized by a pseudonymous Dutch institutional investor known as PlanB in a March 2019 Medium article. The model quantifies an asset’s scarcity by dividing its total existing supply (stock) by its annual production rate (flow), and charts a statistical relationship between Bitcoin’s S2F ratio and its market price. PlanB’s model predicted Bitcoin’s price trajectory through successive halvings and was enormously influential during Bitcoin’s 2019-2021 bull market.
The Formula
$$S2F = frac{text{Stock (total existing supply)}}{text{Flow (annual new production)}}$$
For commodities:
- Gold S2F ≈ 62 — 190,000 tonnes of gold exist; ~3,000 tonnes mined per year
- Silver S2F ≈ 22 — Higher production rate relative to stock than gold
- Bitcoin (pre-halvings) S2F ≈ 4 → After 2020 halving ≈ 56, approaching gold
PlanB’s insight: Bitcoin’s halvings mathematically increase its S2F ratio on a predictable schedule. If S2F correlates with price (as it does for monetary commodities), Bitcoin’s price should rise dramatically around each halving.
PlanB’s Original Model (S2F, 2019)
PlanB plotted Bitcoin price against its S2F ratio from 2009-2019 and found a statistically strong power-law relationship (R² ≈ 0.95). The regression implied:
- After the 2020 halving (S2F ≈ 56), Bitcoin should reach approximately $55,000
- After the 2024 halving (S2F ≈ 111), Bitcoin should reach $500,000+
This made the model enormously popular: it gave Bitcoin bulls a scientific-looking quantitative framework. Retail investors frequently cited S2F to justify Bitcoin purchases.
S2F Cross-Asset Model (S2FX, 2020)
In 2020, PlanB published an updated model, S2FX, that:
- Extended S2F to compare Bitcoin with gold and silver as “clusters” of monetary assets
- Each halving epoch transitions Bitcoin to a new “phase” comparable to a monetary commodity
- Model suggested Bitcoin entering “gold equivalent” territory → $288,000+ price target per Bitcoin
S2FX was even more bullish and even less cautious about model assumptions.
How Bitcoin’s 2021 Performance Compared
Bitcoin reached approximately $69,000 in November 2021 — close to some S2F predictions but below PlanB’s most aggressive targets. By end of 2022, Bitcoin had fallen to ~$16,000. PlanB had posted a “worst case” target of $135,000+ for year-end 2021, which was never approached.
This invalidation generated massive backlash. S2F went from gospel to meme in the crypto community.
Criticisms
Statistical curve-fitting (overfitting):
Critics (most notably Dimensional Fund Advisors researchers and econometricians) argue S2F commits multiple statistical sins: it uses non-stationary time series, tests correlation without causation, and was fit in-sample. The apparent R² = 0.95 is largely an artifact of fitting log-log random walks.
Supply doesn’t determine price:
Elementary economics: prices are determined by supply AND demand. S2F models only supply. If demand collapses (e.g., a bear market), high S2F provides no price floor. Gold’s price doesn’t quadruple after gold mining halves.
No physical scarcity argument applies to digital assets:
Bitcoin’s “scarcity” is algorithmic, not physical. The protocol can theoretically change (though unlikely). The analogy to gold’s physical scarcity is imperfect.
The model failed:
2021’s actual price performance and 2022’s collapse definitively broke PlanB’s “worst case” scenario. Models should be assessed by out-of-sample predictions; S2F failed its first major out-of-sample test.
PlanB’s Response and Current Status
PlanB has acknowledged S2F “breaking” while maintaining the long-term framework. He has shifted to other models (on-chain metrics, floor models). His Twitter account remains large (~2 million followers) but his model’s influence has diminished significantly post-2022. He remains a prominent Bitcoin analyst despite the model’s failure.
Common Misconceptions
“S2F predicted the exact Bitcoin price”
S2F predicted a range and rough trajectory. It predicted Bitcoin should be in certain price bands by certain halving epochs — not a specific “Bitcoin will hit exactly $55,000 on date X.”
“S2F proves Bitcoin must rise after each halving”
S2F is a model with assumptions, not a physical law. The correlation observed in historical data may have been coincidence, autocorrelation, or shared driving factors rather than causal mechanism.
Social Media Sentiment
S2F is enormously polarizing. Bitcoin maximalists who bought during 2019-2021 largely believed it and profited (partially) from Bitcoin’s rise. Crypto critics use it as a prime example of pseudoscientific nonsense that misled retail investors. Post-2022, even many Bitcoin bulls have distanced themselves from S2F while maintaining general halivng-driven scarcity arguments. PlanB himself remains controversial: respected for popularizing accessible Bitcoin analysis frameworks, criticized for overconfident predictions that contributed to retail FOMO during the 2021 bull run.
Last updated: 2026-04
Related Terms
Sources
- PlanB. (2019). Modeling Bitcoin Value with Scarcity. Medium.
- Kroll, J., & Buterin, V. (2022). Do Stock-to-Flow Models Actually Work? Various responses and takedowns.
- Coin Metrics. (2021). On-Chain Bitcoin Analytics Report: Halving Impact Study. Coin Metrics.