Ethereum (ЕТХ) ко-основач Виталик Бутерин has criticized the Stock-to-Flow (S2F) model for predicting and measuring the value of Bitcoin (БТК), claiming that it creates a false sense of financial security about the digital asset’s value.
According to Buterin, financial models like the S2F give people false assurance that the “number will go up” before adding that such models “are harmful and deserve all the mockery they get.”
Акциите до протокот навистина не изгледаат добро сега.
Знам дека е неучтиво да се радуваш и сето тоа, но мислам дека финансиските модели кои им даваат на луѓето лажно чувство на сигурност и предодреденост дека бројот-ќе-подигне се штетни и ги заслужуваат сите исмејувања што ги добиваат. https://t.co/hOzHjVb1oq pic.twitter.com/glMKQDfSbU
- vitalik.eth (@VitalikButerin) Јуни 21, 2022
What is Plan B’s stock-to-flow model?
Crypto analyst Plan B developed the now infamous stock-to-flow model. The model quantifies the value of an asset based on its scarcity. Although originally used for precious metals such as silver and gold, Plan B used it to predict that Bitcoin value would increase 10x every four years.
It gained widespread attention last year when it correctly predicted the future prices of Bitcoin during the bull run, despite minor deviations. But critics claim the major problem with the theory is that it only considers the supply aspect of BTC while assuming demand will keep growing.
Using the model, Plan B предвидено that Bitcoin would reach $100k by the end of 2021; however, the coin only touched an all-time high of $69,000 in November before crashing.
Bitcoin’s decline shines a light on the S2F model
With Bitcoin’s price recovering from its crash to under $20,000, crypto analysts are beginning to take a more cursory look at the S2F model.
The ‘Stock to flow’ model is such an epic failure that PlanB should just delete his account
He won’t though because he sadly still has 1.8 million followers who eat up all of his hopium garbage on a daily basis
— сасал.ет ??? (@sassal0x) Јуни 21, 2022
According to Sassal, the S2F model has been an “epic failure,” adding that Plan B should delete his Twitter account.
Reminds me of the false ‘mathematical’ models @hashed_official posted to con people into thinking UST demand would grow exponentially and LUNA would hit insane price targets like $1,000 pic.twitter.com/T7PIyTULmj
- Фатман (@fatmanterra) Јуни 21, 2022
FatManTerra also used the opportunity to criticize the “mathematical” models that predicted that LUNA’s value could reach $1,000.
Plan B responds
Plan B has responded to the many criticisms of his S2F model, saying that “people are looking for scapegoats.”
По падот, луѓето бараат жртвени јарци за нивните неуспешни проекти или погрешни инвестициски одлуки. Не само почетниците, туку и „лидерите“ стануваат жртви на обвинување други и глумење жртва. Сетете се на оние кои ги обвинуваат другите и оние кои стојат цврсти по несреќата. https://t.co/4nJdHq84pm
- PlanB (@ 100trillionUSD) Јуни 21, 2022
Plan B continued that “leaders” in the space like Vitalik Buterin are “blaming others and playing the victim.”
#bitcoin Оригинален S2F модел од 2019 година (сив) и најновото вклопување на најновите податоци (бели точки). Моделот S2F секако имаше добар тек од март 2019 година (BTC 4K) до март 2022 година (BTC 45K). Засега: или BTC е крајно потценет и наскоро ќе се врати назад, или S2F ќе биде помалку корисен во иднина pic.twitter.com/JdnLINpzTV
- PlanB (@ 100trillionUSD) Јуни 20, 2022
On June 20, Plan B дели a graph showing that the S2F model was accurate between March 2019 and March 2022 and said that “either BTC is extremely undervalued and will bounce back soon, or S2F will be less useful in the future.”
Source: https://cryptoslate.com/vitalik-buterin-calls-plan-bs-stock-to-flow-bitcoin-model-harmful/