Plan B's Stock-to-Flow Price Model Denounced by Vitalik Buterin, Says Model Can Be 'Harmful'
For a few years now, the pseudonymous creator of the popular stock-to-flow (S2F) bitcoin price model, Plan B, has become a very well known bitcoin influencer gathering 1.8 million Twitter followers. However, after the S2F price model didn’t come to fruition and dropped well below the price targets in 2022, Plan B and his price model have been criticized a great deal. On Tuesday, Ethereum’s co-founder Vitalik Buterin denounced the S2F price model and said “financial models that give people a false sense of certainty” can be “harmful,” and they deserve to be mocked.
Plan B’s Stock-to-Flow Bitcoin Price Model Is Not as Popular as It Once Was
A few specific price models have been mocked this week as people have noticed that bitcoin’s price has not followed the “Rainbow” price indicator and Plan B’s famous stock-to-flow price model. The pseudonymous creator of the S2F model caught the attention of the crypto community years ago on March 22, 2019, when he published an editorial called “Modeling Bitcoin’s Value with Scarcity.” When things got bullish in late 2020 and into 2021, Plan B’s statements and price model were revered and at times, the analyst’s predictions were on point.
In January 2021, bitcoin’s (BTC) USD value was seemingly following the S2F model and at the time Plan B said: “bitcoin stock-to-flow model [is] on track… like clockwork.” Toward the end of June 2021, Plan B gave an update on his “worst case scenario for 2021.” The analyst said: “Bitcoin is below $34K, triggered by Elon Musk’s energy FUD and China’s mining crack down. There is also a more fundamental reason that we see weakness in June, and possibly July. My worst case scenario for 2021 (price/on-chain based): Aug>47K, Sep>43K, Oct>63K, Nov>98K, Dec>135K.”
Prediction is hard, especially the future. EMH even says predicting financial markets is impossible. For who is still interested in models, here are 5 BTC valuation models:
– Time (log regression, rainbow) and S2F too high
– UTXO/TX too low
– Difficulty/Mining_cost currently best pic.twitter.com/9FYCbWmbp7
— PlanB (@100trillionUSD) June 21, 2022
After publishing his “worst case scenario” predictions, August, September, and October seemingly reached the targets Plan B forecasted. However, while BTC hit an all-time high at $69K per unit on November 10, it did not make it near the $98K range and December was not even close. Fast forward to the end of 2022’s first quarter and BTC’s price continued to slide lower, and presently, the leading crypto asset’s price compared to the S2F chart is way off the radar. Plan B and his price model have been criticized in the past and by well known BTC advocates. For instance, the owner of Upstream Data, Steve Barbour, once tweeted:
The S2F model is the used car salesman approach to memeing bitcoin to the moon.
Buterin Says ‘Stock-to-Flow Is Really Not Looking Good Now’
In more recent times, Plan B’s model has been mocked and ridiculed more fiercely. Ethereum advocate Anthony Sassano tweeted about the S2F model and Plan B’s predictions. “The ‘Stock to flow’ model is such an epic failure that Plan B should just delete his account,” Sassano said. “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.” The tweet then got the attention of the Ethereum co-founder Vitalik Buterin who also commented on the subject.
“Stock-to-flow is really not looking good now,” Buterin said retweeting Sassano’s statement. “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. Remember who supported S2F and who mocked it even back when it looked like it was accurately describing the trendline,” the Ethereum co-founder added.
Plan B Responds, Analyst’s Fans Tells Him to ‘Keep Posting — I Enjoy the Perspective You Bring’
Plan B responded to Buterin’s statement by retweeting his Tweet on Tuesday with some criticism toward “failed projects.”
“After a crash, some people are looking for scapegoats for their failed projects or wrong investment decisions,” Plan B said. “Not only newbies but [also] ‘leaders’ fall victim to blaming others and playing the victim. Remember those who blame others and those who stand strong after a crash.” Plan B also retweeted an individual who wrote that “Ethereum’s ‘ultrasound’ tokenomics are entirely based on S2F.” Plan B also explained later in the day that he shares his analysis and charts free of charge.
“So I share my analysis and charts FOR FREE,” Plan B wrote on Tuesday. “Never told anybody to buy or what/when/how/howmuch to buy. Now covid, China ban, Russia war and inflation tank all assets including bitcoin… and somehow some weeners blame their investment decisions on me? Lame.”
She's a 10 but according to PlanB
— cryptograffiti (@cryptograffiti) June 21, 2022
As mentioned above, S2F has been targeted for being wrong, but the “Rainbow” price indicator has also been mocked during the last two weeks. In a similar fashion, the Rainbow chart has not contained BTC’s price but some people said they could add a few extra lines of purple to make the chart work again. “I’ve created a new and improved model for the rainbow chart,” the Twitter account @Levelsdennis tweeted.
Meanwhile, a number of bitcoiners sympathized with Plan B and told him to keep up his work. “Indeed. Keep posting pls – I enjoy the perspective you bring,” the popular Twitter account with 1 million followers and dubbed @BTC_archive told the pseudonymous analyst.
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