The stock to flow ratio is:
Understand the Problem
The question is asking for the definition of the stock to flow ratio. This ratio is commonly used in economics when evaluating the value of scarce resources like precious metals, and is also increasingly used in the context of cryptocurrencies like Bitcoin to try to predict future value.
Answer
Approximately correct in practice, but not useful as a thought experiment.
The stock-to-flow ratio is approximately correct in practice, but not useful as a thought experiment.
Answer for screen readers
The stock-to-flow ratio is approximately correct in practice, but not useful as a thought experiment.
More Information
The stock-to-flow ratio is often applied to commodities like gold and, more recently, to Bitcoin to assess its scarcity and potential value as a store of value.
Tips
The Stock to flow ratio is defined as the ratio of the current stock of a commodity and the flow of new production.
Sources
- Stock to Flow Ratio (S2F): How It's Used and Calculated - academy.santiment.net
- What Is Bitcoin's Stock-to-Flow Model? - Cointree - cointree.com
- BTC: Stock-to-Flow Ratio - Glassnode Studio - studio.glassnode.com
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