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Bitcoin Stock-To-Flow Model
The Stock to Flow (S2F) Ratio is defined as the total Bitcoin supply divided by the flow of annual newly issued Bitcoin. It assumes that since Bitcoin is a deflationary asset, its scarcity will increase the value. Since Bitcoin’s future supply and issuance is reasonably predictable, we can extrapolate this model to make future price predictions.
The S2F deflection is simply the price of Bitcoin divided by the S2F price. It is then a measure of how far the S2F ratio deviates from the current price.
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