Quant analyst PlanB is famous for creating the Bitcoin prediction model “S2F” (Stock-to-Flow Ratio), but Ethereum co-founder Vitalik Buterin seems to have a problem with this prediction model.
The S2F model was originally used to measure the scarcity and price trend of commodities such as gold and silver. It mainly considers two variables, the existing supply (Stock) and the annual output of the asset (Flow). There are clear records on the blockchain, and PlanB believes that it is reasonable to apply S2F to Bitcoin.
Indeed, the S2F model accurately predicted the trend of Bitcoin from March 2019 to March 2022, but began to deviate after that. According to the prediction model, Bitcoin should have risen to $100,000 by the end of last year. , topped $10 million after 10 years. But apparently, Bitcoin topped $69,000 last year, and PlanB has drawn criticism for its S2F inaccuracies, and now even Vitalik Buterin has joined the ranks.
According to Vitalik Buterin, Bitcoin’s current downtrend is causing the S2F model to “do not look good.” He explained:
Financial models that give people “false certainty” and a sense of predestination “expecting numbers to rise” are harmful and deserve to be ridiculed.
In a follow-up post, Vitalik asked the crypto community to remember all those who supported Bitcoin’s S2F model, and those who chose to laugh at the S2F model when it seemed accurate.
Vitalik Buterin’s comments were in response to another post by crypto community member @sassal0x, who described the S2F model as an “epic failure.” He says:
The “Stock to flow” model was an epic failure and PlanB should have deleted his account, but he won’t, because sadly there are still 1.8 million daily followers absorbing his rubbish of false hope and opium News.
This article Bitcoin S2F model peddling “false hope”? V God: It Deserves to Be Laughed appeared first on Blocker.