Stock to Flow Chart of Bitcoin: Complete Guide to Price Predictions

Since 2009, Bitcoin has revolutionized the concept of decentralized digital currency, establishing itself as an alternative to traditional financial systems. It captured global attention during its meteoric rise to over $69,000 in November 2021, followed by expansion to new highs. However, investors face the challenge of navigating its characteristic volatility. The Stock to Flow Chart (S2F) model has emerged as a key tool for those seeking to understand price trends based on Bitcoin’s fundamental scarcity principle.

Understanding the Model: Explained Stock to Flow Chart

The Stock to Flow Chart model is an analytical method that quantifies an asset’s scarcity by comparing its total circulating supply (stock) with the annual new production rate (flow). Originally applied to precious metals like gold and silver, this approach has found particular relevance in Bitcoin analysis.

The two fundamental components are clear: the stock represents the total amount of Bitcoin already mined and in circulation (approximately 21 million coins maximum), while the flow is the rate of new coins created annually through mining. The ratio is calculated by dividing the total stock by the annual flow. A higher ratio indicates greater scarcity and, theoretically, higher potential value, following the economic logic of limited supply.

How the Stock to Flow Chart Works: Predictive Mechanism

The stock to flow chart applies this scarcity analysis to Bitcoin, detecting how scarcity increases over time, especially during halving events. These events occur approximately every four years, halving the mining reward and consequently reducing the rate of new Bitcoin supply.

With a fixed maximum supply of 21 million, Bitcoin introduces a unique deflationary aspect. As the total supply approaches its maximum and halvings reduce the flow of new coins, the stock to flow ratio increases, suggesting that the price could gradually escalate. This mechanism has shown a notable historical correlation with price movements in past cycles.

Factors Shaping the S2F Ratio Beyond Halvings

The stock to flow ratio does not depend solely on halving events. Multiple external factors significantly influence it:

Mining and Technological Dynamics: Adjustments in mining difficulty every two weeks affect the speed of new Bitcoin creation. Advances in blockchain technology, scalability improvements like the Lightning Network, and security updates impact demand and usability.

Regulation and Adoption: Global government policies can accelerate or hinder adoption. Favorable regulations boost institutional demand, while restrictions may limit it. Acceptance of Bitcoin as a payment method by institutions and merchants also significantly alters demand dynamics.

Market Sentiment: Emotional fluctuations driven by global economic cycles, geopolitical events, and media coverage can cause volatility disconnected from the fundamentals of the S2F model.

Altcoin Competition: The emergence of alternative cryptocurrencies with potentially superior technology can fragment demand for Bitcoin, affecting its market dominance.

Macroeconomics: Inflation rates, financial crises, and central bank monetary policies influence Bitcoin as a potential hedge against devaluation.

Stock to Flow Chart: Historical Predictions vs. Current Reality

The model’s creator, PlanB, made notable predictions: anticipating $55,000 around the 2024 halving and speculating on reaching $1 million by late 2025. ARK Invest proposed a target of $1 million for 2030. These projections highlight optimism about Bitcoin’s trajectory based on its decreasing supply.

Historically, the S2F model correctly predicted substantial increases after previous halving events, showing a strong correlation with price cycles. However, specific forecasts have not always materialized precisely. As of February 2026, Bitcoin trades around $68,190 after reaching all-time highs of $126,080. This reality indicates that price movements follow more complex paths than a linear scarcity-based model suggests.

Divergent Perspectives: Experts Debate the Stock to Flow Chart

Vitalik Buterin, co-founder of Ethereum, openly criticized the S2F model, calling it “harmful” for its potentially misleading predictions that oversimplify supply and demand dynamics.

Adam Back, CEO of Blockstream, holds a more tempered view, considering the S2F curve a reasonable pattern capturing certain historical trends, though acknowledging its limitations.

Cory Klippsten (Swan Bitcoin) and Alex Krüger (trader and economist) express reservations, warning against overreliance. Krüger dismisses the linear prediction approach as inadequate for capturing market complexity.

Nico Cordeiro (Strix Leviathan) directly questions the underlying assumptions, arguing that dependence on scarcity as the sole value driver ignores critical factors like actual adoption, economic cycles, and regulatory contexts.

Critical Limitations of the Stock to Flow Chart

Despite its popularity among analysts, the Stock to Flow Chart model has substantial limitations:

Over-Simplification: It emphasizes scarcity as the sole value factor, neglecting Bitcoin’s utility as a payment network and its role as a store of value in complex macroeconomic environments.

Unconsidered External Factors: Regulatory changes, geopolitical crises, technological advancements, and economic cycles can exert greater influence than scheduled scarcity.

Prediction-Real Discrepancies: The model failed to accurately predict events like the over 30% drop in the past year (from previous levels), showing its limitations in capturing short-term volatility.

Risk of Misinterpretation: Novice investors may overly depend on simplified predictions, ignoring systemic risks and alternative opportunities.

How to Use the Stock to Flow Chart in Investment Strategy

For investors seeking to incorporate S2F analysis:

1. Fundamental Education: Master basic concepts: stock (total supply), flow (annual production), and their relation to scarcity.

2. Historical Contextual Analysis: Study how prices reacted during past halvings, but recognize that historical correlations do not guarantee future results.

3. Diversify Analytical Tools: Combine S2F with technical analysis (support/resistance, trends), fundamental analysis (adoption, utility), and sentiment analysis (market perceptions).

4. Monitor External Variables: Stay informed about regulatory changes, technological developments (especially Layer-2 solutions), macroeconomic conditions, and market sentiment.

5. Rigorous Risk Management: Set stop-loss orders, size positions appropriately, and limit exposure based on personal risk tolerance.

6. Long-Term Horizon: The S2F model is more relevant for long-term investing rather than short-term trading, given inherent volatility.

7. Periodic Review: The crypto market evolves constantly. Regularly update your strategy based on new information and changing conditions.

The Future of Bitcoin: Beyond the Stock to Flow Chart

As Bitcoin matures as an asset, its price will likely reflect a complex interplay of multiple factors: evolving market dynamics, technological innovations (Lightning Network, sidechains), emerging regulatory policies, and shifts in institutional perceptions.

The S2F chart remains a useful tool for understanding one of Bitcoin’s core value pillars: its scheduled scarcity. However, it should not be the sole analytical framework. Its predictive accuracy will depend on how well it integrates with other indicators and how the market continues to evolve beyond 2026.

The conclusion is that the S2F model offers valuable perspective but is incomplete. Bitcoin will continue to be influenced by technology, regulation, adoption, and macroeconomic dynamics as much as by its inherent scarcity. Savvy investors incorporate the stock to flow chart within a comprehensive strategy that embraces the real complexity of the cryptocurrency market.