Ivan on Tech Academy provides latest insights and reports about the blockchain industry.
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.
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...