Vitalik Buterin argues with PlanB because of the Stock-to-Flow model’s Bitcoin prediction of $100,000

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2022-06-22 05:16:48

During the 2021 bull cycle, PlanB’s Stock-to-Flow (S2F) model has become quite popular in the community, but along with this hypothesis has also attracted many criticisms.

As Chang Zhao, CEO of Binance recently said, “the market is entering a new hibernation cycle that could last until 2026.” The price of the largest cryptocurrency in the market, Bitcoin, dropped to only hovering around the $20,000 threshold, dragging a series of other cryptocurrencies down in price. However, the founder of Ethereum – Vitalik Buterin showed a commendable positive spirit to the community.

Over the past time, “Crypto Prince” Vitalik has continuously offered opinions on all topics related to cryptocurrencies. For example, after feeling frustrated by the sluggish development of Ethereum, Vitalik immediately opened a discussion for those who own Ether, allowing them to openly express their dissatisfaction about it. older brother. Vitalik also expressed skepticism about the metaverse and stated that he does not expect cryptocurrencies to replace traditional currencies.

And most stirring yesterday (June 21), the founder of Ethereum directly criticized the Stock-to-Flow (S2F) model with mixed views popularized by PlanB. This is a model that PlanB is extremely confident of receiving a lot of interest by the end of 2021. One of S2F’s “solid” predictions is that Bitcoin will hit $100,000. While, reality shows that Bitcoin has not achieved exactly what PlanB expected.

Ethereum Founder Criticizes PlanB’s Stock-to-Flow Model

“Stock-to-Flow (S2F) is not good at all.”

” I know it’s impolite to say this, but I think financial models that give investors a sense of certainty and foreknowledge that price increases are harmful and deserved. all the ridicule that the community has given them.”

Basically, the S2F model is based on quantifying the price of an asset, estimated by their scarcity, and is mainly suitable for calculations for common metals such as gold and silver. Accordingly, PlanB took advantage of the limited supply 21 million units of Bitcoin and reflects that the BTC price will continue to go up steadily and impressively with returns of about ten times every four-year growth cycle.

However, the problem many critics point out with the S2F model is that it follows a one-way estimate. S2F only takes into account the supply of BTC, but ignores assumptions about impact from macro factors, unexpected market crashes, or reduced user demand.

“I wonder what the model would look like without estimating macro impacts or unforeseen troubles like the collapse of LUNA-UST. My guess is that S2F cannot account for certain circumstances.”

Surprisingly, not long after this sarcastic remark, PlanB responded to Vitalik Buterin with an equally scathing attitude.

“After a sudden crash from the market, some people are looking for *excuses* for their failed projects or bad investment decisions. Not only the novice but the *altcoin leader* also blames others and plays the victim.”

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