Anonymous Analyst PlanB Begins Stock-to-Flow Research
Pseudonymous analyst PlanB joins Bitcoin Twitter and begins developing stock-to-flow model that would become influential in analyzing Bitcoin's scarcity and value.
On July 2, 2018, a pseudonymous analyst using the handle PlanB joined Bitcoin Twitter and began sharing research on applying stock-to-flow modeling to Bitcoin. PlanB's work would eventually become one of the most influential and controversial Bitcoin valuation models, focusing on the relationship between Bitcoin's scarcity (its limited supply and halving schedule) and its market value.
The stock-to-flow (S2F) ratio measures scarcity by dividing an asset's existing stock (total supply) by its annual flow (new production). Precious metals like gold and silver have high stock-to-flow ratios because their existing supply vastly exceeds annual mining production, making them reliably scarce. PlanB hypothesized that Bitcoin's value correlated with its stock-to-flow ratio, which increased every four years when Bitcoin's halving events cut new supply issuance in half.
The model suggested that Bitcoin's programmatically enforced scarcity—with its fixed 21 million coin cap and predictable issuance schedule—created fundamental support for price appreciation as the stock-to-flow ratio increased over time. PlanB's initial research during mid-2018 would be formalized and published in a comprehensive Medium article in March 2019, but the foundations were being developed during Bitcoin's 2018 bear market.
The stock-to-flow model would become enormously popular in Bitcoin communities, providing a quantitative framework for understanding Bitcoin as scarce digital commodity comparable to precious metals. Critics would later argue that the model committed statistical errors, ignored other value determinants, and provided misleading precision in its predictions.
For Bitcoin's intellectual development in 2018, PlanB's emerging research represented part of a broader effort to develop rigorous analytical frameworks for understanding Bitcoin's monetary properties and value proposition. The stock-to-flow work connected Bitcoin to established commodity valuation approaches, helping traditional investors understand cryptocurrency through familiar concepts.PlanB's research would influence how many investors thought about Bitcoin's halving cycles and long-term value trajectory, becoming one of the most cited Bitcoin valuation models despite ongoing debates about its validity.