Stock-to-Flow
Also: S2F
economics · intermediate
Existing supply divided by annual new supply. A scarcity ratio. Higher means a smaller fraction of the stock is added each year.
Gold has historically been around 60: ~200,000 tonnes above ground, ~3,000 tonnes mined per year. Silver is closer to 22 because more is industrially consumed. Bitcoin steps up at every halving; post-2024 halving the ratio is roughly 120 — higher than gold, on a programmatic schedule, with no possibility of supply discretion.
S2F is a description of scarcity, not a price model. PlanB's 2019 paper proposed a log-log regression between BTC's price and S2F and produced eye-catching price targets that failed empirically after 2021. The critique is well-summarized: regressing two co-moving monotonic time series produces a high R² even when there's no causal link, scarcity is necessary but not sufficient (tin pennies are rare), and gold contradicts the model.
The useful version of the concept is what Saifedean Ammous called *unforgeable costliness* — Bitcoin is scarce in a way that requires real energy expenditure to verify, no human can override the schedule, and the supply trajectory is publicly auditable in advance.