Vitalik Buterin made fun of the Bitcoin Stock-to-Flow (S2F) price prediction model. Buterin said that all those who trust such models ”deserve all the ridicule they get”.
The current volatility of the crypto market confused analysts and price forecasting models alike. The Bitcoin price is currently at $ 21,148.40 after a fall of 28.3% over the past 30 days. On June 18, the Bitcoin price fell below $ 18,000 for the first time since November 2020.
S2F model – A picture of PlanB
Volatile Market and Volatile Bitcoin
The stock-to-flow (S2F) model was first introduced in early 2019 by the former pseudonymous institutional investor PlanB. The investor took the S2F model from the traditional market and applied it to Bitcoin. Initially, the model was used to evaluate raw materials, such as precious metals.
The model proved itself relatively well until recently. But with increasing volatility in the crypto market, the Bitcoin price fell below the level predicted by S2F.
Vitalik Buterin is one of those people who are once again interested in the model that seems a little too optimistic. “The stock-to-flow model doesn’t look particularly good right now,” Buterin wrote in a Twitter post. “I know it’s rude to be malicious. But I think that financial models that give people a false sense of security are dangerous. The models predict that prices will go up and in my eyes they deserve all the ridicule they get.”
Stock-to-flow is really not looking good now.
I know it’s impossible 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
A picture from Twitter
The Ethereum founder added: “Remember who supported S2F and who was already making fun of it back when it looked like the model was accurately describing the trend line.”
Buterin’s comments were a response to Ethereum ecosystem employee Anthony Sassano, who is also not impressed by the recent performance of the S2F model.
”The stock-to-flow model is such a big letdown that PlanB should just delete his account,” Sassano said. “But he won’t do that, because unfortunately he has over 1.8 million followers who eat his hopium garbage every day.”
While the comments were positively received by some, not everyone was so convinced by the criticism. One Twitter user suggested that while Sassano doesn’t share PlanB’s perma-bullish stance on Bitcoin, his position on Ethereum is hardly different.
PlanB strikes back
Despite the comments of Vitalik Buterin, PlanB was not ready to accept the criticism without backlash.
”After a crash, most people are looking for a scapegoat for the failed projects or the wrong investment decisions,” PlanB said. “Not only newcomers, but also ”leaders” then blame others and portray themselves as victims. Remember who blames others and who remains strong even after a breakdown.”
Regarding the future development of the Bitcoin exchange rate, PlanB said: “Either BTC is extremely undervalued and will soon recover, or the S2F model will be less useful in the future.”
Like any other analysis tool, the S2F model is either helpful or not. Either it predicts a trend or it doesn’t. It is up to each investor how much faith he wants to give to the PlanB model.
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