Bitcoin's scarcity is central to its value proposition, and the Stock-to-Flow (S2F) model leverages this to forecast price. First published in March 2019 by pseudonymous trader PlanB, the model accurately predicted certain Bitcoin price milestones but completely missed the mark in 2022. With 2025 approaching, PlanB has updated his predictions, sparking renewed debate.
Core Logic of the S2F Model
The S2F model was originally applied to scarce commodities like gold and silver. It compares the current stock (total supply) to the flow (annual production). Bitcoin's current stock is about 19.81 million coins, with an annual flow of approximately 164,250 BTC (based on the current block reward of 3.125 BTC every 10 minutes). This yields an S2F ratio of roughly 120.6, meaning it would take 120 years to mine all Bitcoin at current rates. The model posits that as halving events reduce new supply every four years, Bitcoin's scarcity increases, driving its price upward.
PlanB's 2025 Price Predictions
PlanB's updated trajectory from September 2024 includes: $70,000 in October 2024 (classic pump month); $100,000 in November after Trump's potential election win and US crypto policy shift; $150,000 in December due to ETF inflows; $200,000 in January 2025 as the US re-embraces crypto; $300,000 in March as Bhutan, Argentina, and Dubai adopt Bitcoin as legal tender; $500,000 in May as more nations join; $1 million between July and December 2025 during a "face-melting FOMO" phase; and a potential correction to $500,000 or $200,000 by 2026-2027 in a bear market.
Key Flaws and Criticisms
While the S2F model is popular for its simplicity, many experts argue it overemphasizes supply while ignoring demand drivers such as market sentiment, technological progress, regulatory changes, and real-world adoption. For instance, in 2022 Bitcoin fell to around $30,000, far below the model's predicted $100,000. The model fails to account for unexpected macro events or sentiment shifts. Additionally, Bitcoin's actual utility and growing institutional adoption are critical price factors that the model omits.
Conclusion: Useful but Not Foolproof
The S2F model offers insight into Bitcoin's long-term scarcity narrative, but investors should not rely on it alone. Combining on-chain data, macroeconomic indicators, and regulatory developments provides a more robust strategy. As PlanB himself says, models are tools, not prophecies.