Stock-to-Flow.
The scarcity model and its limits.

What Stock-to-Flow measures

Stock-to-Flow is the ratio of existing supply (stock) to annual new production (flow). Gold's S2F sits around 60, meaning it would take roughly 60 years of mining at current rates to double the existing above-ground supply. Silver sits near 22. Platinum and palladium are far lower. High S2F has historically been a marker of monetary-grade scarcity.

Bitcoin's S2F doubles at each halving. After the 2012 halving it was ~8. After 2016, ~24. After 2020, ~55. After the April 2024 halving, Bitcoin's S2F sits around 120. By the math, post-2028 halving it will sit around 240, well above gold.

Plan B's original model (March 2019)

Plan B, a pseudonymous Dutch institutional investor, published "Modeling Bitcoin Value with Scarcity" in March 2019. The approach: fit a power-law regression to 111 monthly Bitcoin data points of S2F vs. market cap, then plot gold and silver on the same line.

The model predicted Bitcoin would reach roughly $55K after the May 2020 halving and $100K+ by late 2021 or mid-2022. At publication, Bitcoin was trading near $4,000. The prediction looked absurd to most readers.

Bitcoin hit $69K in November 2021. The first prediction window came close to being met. For a two-year forecast starting from $4K, this was remarkable.

Why it worked 2012 to 2021

Across three full halving cycles, Bitcoin's price tracked the S2F trajectory with striking fidelity. The correlation was the most compelling quantitative case any Bitcoin model had produced, and it drove significant institutional attention. Paul Tudor Jones cited scarcity dynamics in his 2020 thesis. MicroStrategy's first buys came within months of the model's validation. A generation of allocators used S2F as the shorthand case for Bitcoin.

The bull case was simple: supply is mechanically halved every four years; demand has grown; price rises to meet the new ratio. Three cycles in a row, that is what happened.

Its failures since late 2021

The model predicted a significant further breakout after the 2024 halving. Specific predictions from the original and cross-asset variants pointed at roughly $288K by late 2024, with some extrapolations going higher. Actual peak in late 2024 and early 2025 was roughly $108K, and the cycle has since spent time well below that.

The 2022 bear marketBear marketA long slide in prices, usually defined as a drop of 20% or more from a recent high in a broad market index such as the S&P 500. Bitcoin's four completed cycle bear markets bottomed 77% to 93% below their peaks, and so far it has gone on to new highs after each one. also broke the model's trajectory. Bitcoin fell to $16K when the model suggested a floor well above that. Macro conditions (the 2022 rate hiking cycle, FTX implosion, Luna collapse) drove price far below the scarcity-implied value.

The core critique

Nic Carter and others have made the sharpest version of the critique: S2F is partly tautological. Every halving mechanically reduces flow and mechanically raises S2F, whether or not demand keeps up. Correlation between a deterministic variable and historical price does not prove causation. It may prove that past cycles coincided with macro conditions that favored risk assets. Future cycles may not.

A second critique: the model has only three full-cycle data points. Power-law fits on three data points are statistically fragile. The r-squared looks impressive until you realize how few independent observations support it.

What it gets right

Scarcity matters. Hard-capped supply is unusual, and it is part of why Bitcoin accrues a monetary premium at all. The directional point (scarcer assets tend to appreciate relative to infinite-supply assets) is real and defensible. A gold-standard currency historically outperformed paper currencies in long-durationdurationA measure of how sensitive a bond price is to interest rate changes. A bond with 10-year duration falls roughly 10% in price when rates rise 1 percentage point. Longer duration = more interest rate risk. store-of-value terms.

S2F also pointed at a real mechanism: each halving shifts the miner economics, and miners selling pressure on the spot market is a significant variable. Lower flow means lower sustained selling pressure from the marginal producer.

How to actually use it

Treat S2F as a scarcity ratio, not a guaranteed price model. A reproducible audit records stock in BTC, annual flow in BTC/year and the observation date; the ratio has units of years. Specify actual trailing issuance versus annualized issuance at the current subsidy. Then save the exact model version, fitting window, price currency, forecast date and target horizon. Test later, out-of-sample prices without refitting, and compare errors with a simple benchmark. Fixed issuance does not guarantee demand or returns. Use the verification worksheet before sharing a price target.^[1]

• Use it to frame the long-duration thesis. Bitcoin's supply curve is unique.
• Do not use it as a price target. The error bars are wide enough that any specific dollar figure is noise.
• Discount anyone quoting S2F as precise. The critique is too sound to ignore.

Plan B's current status

Plan B has periodically revised the model and walked back specific price predictions. The "v2" and the cross-asset variants have also diverged from actual price since 2022. Treat the family of models as illustrative, not predictive.

The broader lesson: even a model that was famous enough to move markets failed to predict the next cycle accurately. Anyone promising a specific Bitcoin price for a specific date is selling conviction, not analysis.