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Stock-to-Flow Model - Why is Stock to Flow a Big Deal for Bitcoin?

Written By Ivan on Tech

Jul 02, 2020

Those keeping an eye on the cryptocurrency space will likely be familiar with the term “stock-to-flow model”. However, what exactly is this stock-to-flow model - and why is it important for the cryptocurrency industry as a whole? This article breaks down the stock to flow Bitcoin implications and why traders are getting so excited for stock-to-flow in the future.

Stock-to-Flow (S2F)

First and foremost, we need to look at what the Bitcoin stock-to-flow model actually is. A stock-to-flow model, or S2F model, is a technical tool that traders traditionally use. As such, stock to flow Bitcoin use-cases are, in fact, relatively new. Other scarce assets such as gold routinely use a stock-to-flow model in order to calculate price changes.

Earlier this year, stock to flow Bitcoin models became popular, due to the then-approaching 2020 Bitcoin halving event. However, understanding the stock-to-flow model is essential even when there isn’t a Bitcoin halving event...

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