Ethereum founder lashes out at Stock-to-Flow model

The founder of the Ethereum (ETH) network, Vitalik Buterin, has today lashed out at the famous model of the Dutch analyst PlanB with which the price of bitcoin (BTC) could be predicted. This Stock to Flow According to Buterin, the model gives investors a ‘false sense of security’.

Bitcoin stock-to-flow is under attack

In 2019, the Dutch investor and analyst came up with the name PlanB with his stock to flow model to predict the price of bitcoin. He used a formula between the stock of bitcoin and the production capacity. In the past, this model of PlanB proved to be extremely accurate.

In the meantime, however, PlanB’s model has apparently lost this predictive power. The model predicted a bitcoin price higher than $100,000 in 2021, or at least at the beginning of 2022. We know today that the price is many times lower than that.

‘A false sense of security’ for crypto investors

That is why PlanB’s model is now mainly ridiculed. Vitalik Buterin also has nothing good to say about the model. According to him, financial models, such as the Stock-to-Flow model, are misleading and it can even be dangerous if people accept such models as truth.

“Stock-to-flow really doesn’t look good right now. I know it’s rude to gloat and stuff, but I think financial models that give people a false sense of certainty and predestination that the numbers will go up are harmful and deserve all the ridicule they get.”

PlanB responds to criticism

The man behind the now infamous model has also responded to the fierce criticism. In his view, it is unfair to criticize his model in this way, because important macroeconomic factors that are currently at play are not taken into account. PlanB has never denied this, in its own words.

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According to PlanB, either bitcoin’s price will soon make a significant price boost, or its S2F will be less valuable in the future.

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