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Vitalik Buterin Criticizes PlanB’s Stock-to-Flow Bitcoin Model

cryptoknowmics.com 21 June 2022 10:30, UTC
Reading time: ~2 m

Ethereum co-founder Vitalik Buterin criticized the popular Stock-to-Flow (S2F) model, which has deviated severely from its price predictions. The pseudo-anonymous creator behind the model, PlanB was quick to respond to Buterin.

"Not Looking Good Right Now"

PlanB’s Stock-to-Flow (S2F) Bitcoin model gained a lot of attention during the bull run as it got several price predictions right. However, it also deviated on a number of occasions during the bull market to give incorrect price predictions. For instance, the model incorrectly predicted that BTC would touch $100,000 by December 2021 which didn’t happen. It also attracted countless critics, following the recent market slumps in which the asset recorded an 18-month low beneath $20,000, going outside of its bullish predictions. With its growing list of critics, Vitalik Buterin says it “deserves all the mockery they get.” https://twitter.com/VitalikButerin/status/1539167095312850944

PlanB Responds

Plan B responded to Buterin’s criticism claiming “people are looking for scapegoats for their failed projects or wrong investment decisions.” https://twitter.com/100trillionUSD/status/1539169646410182656 The Stock-to-Flow model predicts the future price of a commodity based on its scarcity. It was applied to predict the price of precious metals such as gold and silver. However, anonymous quant, PlanB, has used it on Bitcoin and has since been credited as the creator of Bitcoin’s S2F model.

PlanB's version argues that the price of Bitcoin rises post-halving because there’s a small supply shock to the market. The trader argues that Bitcoin is just like any other commodities, such as gold or silver, whose value is tied to their scarcity.

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