Stock-to-Flow Ratio in USD

What is "Stock-to-Flow Ratio in USD"?

Stock-to-Flow is a valuation model based on the assumption that an asset’s scarcity influences its value. The indicator is calculated as the ratio of the current circulating supply of Bitcoin to its annual production and is compared with the Bitcoin market price expressed in US dollars.

Why is "Stock-to-Flow Ratio in USD" important?

The ratio reflects Bitcoin’s scarcity by comparing the existing supply with the rate of new issuance. Because Bitcoin issuance is programmatically limited and decreases through halvings, the indicator is used to analyze long-term supply dynamics and its potential impact on market valuation.

How is "Stock-to-Flow Ratio in USD" calculated?

The ratio is calculated as:

Сirculating BTC supply / annual BTC production.