Ethereum creator Vitalik Buterin commented on the complete failure of PlanB’s Stock-to-Flow model. He stated that predictions that give a false sense of certainty and certainty deserve ridicule and censure.
On June 18, the price of bitcoin fell to $17,600. This value is beyond the lower bound of the S2F model. Such a significant drop in the rate calls into question the very mechanism for calculating the forecast, not to mention its accuracy.
On his Twitter page, Buterin said that such models should be condemned. Otherwise, there is a risk that more investors will suffer from them.
PlanB did not leave the audience’s criticism unchallenged. He noted that the system had performed well between 2019 and March 2022. At the end, he added that there are two options for future developments – bitcoin will dramatically regain lost ground or the model will become ineffective in the future.
What is S2F?
This model assumes that the rate of BTC can be predicted. Its key principle is that the asset will grow steadily with a tenfold return every four years. The model uses the ratio of the current supply of BTC to its production stream to calculate the value.
The model was mercilessly criticized late last year. According to the forecast, the rate of the asset was supposed to reach the level of $100,000, but it didn’t happen. At the time, PlamB stated that this was the first failure of the model since 2019. But apparently, it won’t be the last.