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PlanB’s Stock-to-Flow (S2F) model has become popular during the bull cycle in 2021. However, there is still a lot of criticism surrounding this hypothesis.
It seems that during the period when the market is falling into a “hibernation” cycle, Ethereum founder Vitalik Buterin has become more active with the community as he continuously makes comments on all topics related to the money industry. encode.
The presenter is that after feeling quite disappointed about the recent development of Ethereum and the crypto community, the “Distinct Genius of the Blockchain World” immediately opened up a discussion for the Ether community to let them straight. openly share things that are not satisfactory about himself. Even Vitalik Buterin expressed “skepticism” about the definition of the metaverse. As well as saying that he does not expect cryptocurrencies to be able to replace traditional currencies.
And most recently on June 21, the founder of Ethereum directly criticized the controversial Stock-to-Flow (S2F) model popularized by PlanB, who was confident Bitcoin would reach $100,000 by the end of the year. 2021 when applying this analysis to the BTC price. However, reality shows that Bitcoin has not lived up to PlanB’s expectations.
Stock-to-flow is really not looking good now.
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. https://t.co/hOzHjVb1oq pic.twitter.com/glMKQDfSbU
— vitalik.eth (@VitalikButerin) June 21, 2022
“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 predictability that price increases are harmful and deserve all. even the ridicule that the community has for them.”
The S2F model is based on quantifying the price of an asset because of its scarcity and is mainly used for common metals such as gold and silver. So, PlanB has also taken advantage of Bitocoin’s limited supply of 21 million units to reflect that the price of BTC will continue to move up in a steady and impressive manner with approximately ten times the return after each repeated growth cycle. after four years.
However, the key problem with the S2F model that many critics have pointed to is the one-way estimate, where S2F only takes into account the supply side of BTC while rejecting assumptions from macro factors, an unexpected breakdown occurs in the market or a decrease in user demand.
I wonder how the model would have looked without the macro backdrop or crypto collapses such as Luna. My guess is the model can’t account for certain externalities.
— Peter McCormack ️ (@PeterMcCormack) June 20, 2022
“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 that, Plan B responded to Vitalik Buterin’s criticisms with an equally harsh attitude.
After a crash aome people are looking for scapegoats for their failed projects or wrong investment decisions. Not only newbies but als “leaders” fall victim to blame others and playing the victim. Remember those who blame others and those who stood strong after a crash. https://t.co/4nJdHq84pm
— PlanB (@100trillionUSD) June 21, 2022
“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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