A list of the greatest blows to the S2F model

Eric Wall
3 min readJul 1, 2020


The Stock-to-Flow model (S2F), invented and popularized in 2019 by PlanB in the piece “Modeling Bitcoin Value with Scarcity”, is one of the most popular price theories for bitcoin, suggesting that the S2F of bitcoin is what drives its price.

The popularity and credence of the model was earned mainly through three parts of supporting evidence:

  1. high R-squared between the log of S2F <> log of marketcap (~0.95)
  2. a cointegration test suggesting a more fundamental relationship between those same variables (Nick Emblow’s Aug 2019 study)
  3. the relationship being consistent also for other scarce assets, such as gold

List of counter-evidental discoveries and events

During the recent months, a series of interesting reveals have been made by various people, weakening the case for the S2F model and its supporting evidence. Each item in the list below addresses one supporting argument above. These are the recent highlights that I think have been most instrumental in tearing the S2F model apart, beyond the more fundamental criticisms that have been aired by many since the beginning.


It’s quite telling that even the main boosters of the S2F model (the ones applying the most sophisticated statistical analysis, on which the Bitcoin community has thus far relied) eventually turned on the model due to the lack of sound econometric assumptions.

Notably, Nick Emblow and Marcel Burger are now both vocal critics of the S2F model (an impressive testament to their intellectual honesty, which I’m very thankful for).

“Even if S2F ends up being garbage or another rainbow chart, there are plenty of other reasons bitcoin will continue to outperform every other asset” — Nick Emblow.