DeutschThe stock-to-flow ratio refers to the scarcity of an asset. The higher the value, the higher the price of the underlying asset in theory.
Stock-to-Flow Ratio for Bitcoin
In the past, the so-called Stock to Flow Ratio has been repeatedly used, especially for Bitcoin, to support statements on probable price gains. However, the S2F analysis mostly refers to the precious metal gold. The background is the determination of the rarity of an asset.
The background here is the consideration of the limited available amount of an asset, such as BTC, called Stock. Flow, in turn, refers to the amount of BTC that is additionally mined per year until the maximum is reached.
Related to each other, these two values result in the speed at which the defined total stock is reached. As described above, an asset is rarer the higher the stock-to-flow ratio. Therefore, assets with a high stock-to-flow ratio are particularly suitable as a Store of Value.
