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1/ This is an idea I’m still working with, so comments and corrections welcome: S2F is only an *outcome* of something more fundamental, hence some people taking offence at the metric being used to explain bitcoin’s value.
2/ For instance, you theoretically could have a good in low demand with a high S2F ratio, and its high S2F ratio would be a *product of* its low demand. The sale value of the good would be so low that only a few small manufacturers would bother producing it.
3/ Now let’s imagine that same good, for whatever reason, suddenly sees a surge in demand. New manufacturers would rush in, supply would increase, and S2F would rapidly decrease. It was always cheap to make, just few people originally wanted it compared to the existing stock.
4/ Therefore the important thing when it comes to bitcoin and money is not S2F (that‘s just an indicator) but something like *the rate of production possible under demand vs. existing the stock*, or perhaps, *the cost of production per unit vs. the total value of the stock*.
5/ Gold is relatively expensive to produce per unit compared to its market cap, which *leads it to have* a high S2F. A key thing to note here is that increases in demand will increase prices, which will lead to an increased supply, which will lead to temporarily decreasing S2F.
6/ For bitcoin, the cost of producing new units trends to infinity. Post-21-million, the cost of production is essentially infinite—no more can be produced regardless of the size of demand, S2F is fixed. *As a result*, the S2F also trends to infinity. The relationship is causal.
7/ A few things to note here: a) this metric (which doesn’t have a name yet) is always changing based on changes in the market: new discoveries, new production methods, fluctuations in demand, etc. Like S2F, it only applies to the instant it is calculated...
8/ b) It is not possible to objectively measure this metric, as is the case with S2F. Only subjective estimates can be made based on the incomplete market information available. This doesn’t mean the difficulty isn’t real—it is—an estimate can be further or closer to the truth...
9/ c) When appraising a monetary good, one should not just make subjective judgements about what the metric is at now, but also how it might change in the future, based on an understanding of the properties of the good in question and expected changes in the market.
10/ So tying this back into the S2F of bitcoin vs shitcoins: to avoid accusations of cherry picking what S2F applies to and what it doesn’t, it needs to be made clear that it’s really about the *difficulty of production under demand* and *how this might change in the future*.
11/ When it comes to bitcoin, the only way to make it easier to produce would be to change the supply schedule. All indications are that this is, and will remain, extremely difficult regardless of the magnitude of future demand. That would be a topic for a whole other thread.
12/ Shitcoins on the other hand, are a different kettle of fish. Looking at Ethereum for example, ignoring the infinite inflation currently in place, no one in their right mind would say that Ethereum doesn’t have a flexible supply schedule. Changes are discussed regularly.
13/ The type of people that support Ethereum just so happen to have an almost perfect overlap with the type of people that say things like “rules have to adapt with the needs of society.” They’re flexible, they’re pragmatic, they’re proud to be non-dogmatic. 
14/ We know that many Ethereum investors and developers would happily change their supply schedule under certain conditions, e.g. arbitrarily paying developers, arbitrarily reducing supply to pump the price, arbitrarily adjusting for societal inequality, etc.
15/ Exacerbating these issues are the fact that the core developer and full node communities for most shitcoins are very small, a few developers/nodes each. Their supplies would be easier (than bitcoin) to compromise—e.g. by a state attacker—under conditions of high demand.
16/ Could a shitcoin emulate bitcoin’s difficulty-of-production characteristics? Theoretically it’s possible. But you’d have to ponder how it would happen given that: a) the more bitcoin is adopted, the more secure its supply schedule becomes...
17/ b) Why anyone would want a new bitcoin when they can just have...bitcoin (paraphrasing Hayek because I can’t find the quote: money is the one thing people want to be more expensive), c) the history of shitcoiner derision of monetary economics and node governance.
18/ In summary, the question of [why bitcoin demand is correlated to the S2F ratio] is less interesting than [why bitcoin‘s S2F ratio does not and will not change under increasing demand].
