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Intro to On-Chain

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Exchange Flows/Indicators

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UTXO Data/Indicators

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Fund data & Premium

Stock to Flow Ratio

Stock to Flow (SF) Ratio is defined as a ratio of currently circulating coins divided by newly supplied coins

Definition

Stock to Flow (SF) Ratio is defined as a ratio of currently circulating coins divided by newly supplied coins.

$\text{SF Ratio} = \frac{\text{Currently circulating coins}}{\text{Newly supplied coins}}$

Interpretation

SF ratio assumes that the scarcity of the coin drives the price of the coin. The analysis on SF ratio is first presented by a pseudonymous Dutch institutional investor who operates under the Twitter account “PlanB”. By looking at SF ratio as a chart, we can spot where the market regime is.

-If Newly supplied coins decrease, SF Ratio rises.

-If circulating coins rises, SF Ratio rises.

Use Case

Statistical analysis on SF ratio

The original authors claim that the log of SF ratio is in a linear relationship with the log of the price. We reproduce the results of what they claim and as a result, shown in the figure below, SF ratio and price are in a linear relationship (not perfectly but in some sense) with significant statistics (p-value under 0.01, R-square over 90%).

Following the above linear statistics (trend and intercept), we can plot how closely they are related in a time-series manner. With this graph, we can recognize that the current price is in what regime recently.

Link to Our Data