Vitalik Buterin Mocks the Bitcoin Stock-to-Flow Model, PlanB Responds

Ethereum’s co-founder used the recent market crash as an opportunity to lash out against the Bitcoin stock-to-flow model, which has deviated severely from its price predictions. The S2F creator responded quickly and didn’t hold back.

Buterin and ETH Against the S2F

Developed and published a few years ago by a popular crypto analyst going by the Twitter handle PlanB, the stock-to-flow model and its variations predict BTC’s future price based on the size of existing reserves (stockpiles) and the annual supply of bitcoins on the market (flow).

It attracted countless supporters as it predicted massive price tags for bitcoin, many of which came true. However, the model started getting it wrong at the end of last year as it forecasted $100K by December, which didn’t happen.

Moreover, it sees BTC trading in a large range of between $50,000 and $150,000 for 2022. Following the recent market slumps in which the asset recorded an 18-month low beneath $20,000, it’s safe to say that the model has gone way outside of its bullish predictions.

S2F also had a fair share of critics, one of the most prominent being Vitalik Buterin. Earlier today, he supported one of Ethereum’s core developers who blasted the model, calling it an “epic failure.” Although Buterin was more diplomatic with his choice of words, he also discredited the model.

Stock-to-flow is really not looking good now.

I know it’s impolite to gloat and all that, but I think financial models that give people a false sense of certainty and predestination that number-will-go-up are harmful and deserve all the mockery they get. https://t.co/hOzHjVb1oq pic.twitter.com/glMKQDfSbU

— vitalik.eth (@VitalikButerin) June 21, 2022

PlanB’s Answer

It didn’t take long for the creator of the model to get involved in the conversation, saying that “leaders” also tend to “blame others and play[ing] the victim” during and after a market crash.

After a crash aome people are looking for scapegoats for their failed projects or wrong investment decisions. Not only newbies but als “leaders” fall victim to blaming others and playing the victim. Remember those who blame others and those who stand strong after a crash. https://t.co/4nJdHq84pm

— PlanB (@100trillionUSD) June 21, 2022

In an earlier tweet, PlanB admitted that the model had a “good run” for three years (until March 2022) but has deviated from its trajectory as of now. As such, the analyst said there’re two possible conclusions from the current landscape – “either BTC is extremely undervalued and will bounce back soon, or S2F will be less useful in the future.”

Featured Image Courtesy of Forbes