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Vitalik Buterin Calls Plan B’s Stock Flow Bitcoin Model “Damaging”

Vitalik Buterin Calls Plan B’s Stock Flow Bitcoin Model “Damaging”

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Ethereum (ETH) co-founder Vitalik Buterin has criticized the stock-to-flow (S2F) model for predicting and measuring the value of bitcoin (BTC), claiming that it does not correlate with the value of the digital asset. Creates a false sense of financial security.

According to Buterin, financial models like S2F give people the false assurance that “the numbers will go up” before adding that such models “are harmful and deserve all the derision they get.”

What is the stock-to-flow model of Plan B?

Crypto analyst Plan B has developed the now infamous stock-to-flow model. The model determines 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 the value of bitcoin would increase 10 times every four years.

It attracted widespread attention last year when it correctly predicted the future price of bitcoin during a bull run, despite minor deviations. But critics claim that the major problem with the theory is that it only considers the supply aspect of BTC, while assuming that demand will continue to grow.

Using the model, Plan B predicted 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 fall sheds light on the S2F model

With the price of bitcoin from its crash below $20,000, crypto analysts have begun to take a more cursory look at the S2F model.

According to Sassal, the S2F model has been an “epic failure”, adding that Plan B should delete its Twitter account.

FatManTerra also used the opportunity to criticize the “mathematical” model, which predicted that the value of LUNA could reach $1,000.

Plan B Responds

Plan B has responded to several criticisms of its S2F model by saying that “people are looking for scapegoats.”

Plan B continued that “leaders” in space like Vitalik Buterin are “blaming others and playing victim.”

Plan B on June 20 share A graph showing that the S2F model was accurate between March 2019 and March 2022 states that “either BTC is undervalued and will bounce back soon, or S2F will be less useful in the future.”

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Vitalik Buterin Calls Plan B’s Stock Flow Bitcoin Model “Damaging”

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