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June 21, 2022

Bitcoin Stock-to-Flow Model Is Called Into Question By Vitalik Buterin

Stock-to-flow (S2F) model critics, including Ethereum’s Vitalik Buterin, allege that the model makes inaccurate forecasts regarding the price of Bitcoin (BTC). To him, faulty financial models are dangerous because they encourage people to assume that prices will rise.

Those who created the S2F model PlanB in response claim that some individuals are just looking for someone else to blame for their failed businesses and bad investment choices following the crypto market crisis.

On the 21st of June, Vitalik Buterin accused the S2F model of making inaccurate forecasts regarding the price of Bitcoin. As of this writing, the S2F trendline for Bitcoin (BTC) has deviated significantly from the BTC price.

This is not looking good for stock-to-flow at the moment. No offense intended, but I believe that financial models that provide a false feeling of security and destiny by predicting that the number-will-rise should be mocked.

Bitcoin price predictions may be made using the S2F model, which many consider the best available. Bitcoin’s price has fluctuated significantly since the model’s predictions were accurate in the past, due to the two crypto market collapses and the rise in FUD.

To respond to Vitalik Buterin’s tweet, PlanB said some novices and leaders are blaming others for their unsuccessful ventures and investment decisions. After an accident, it’s important to speak up for yourself rather than blaming others, he says.

PlanB, on the other hand, argued in a tweet on June 20 that the model will be inefficient in the future.

As of March 2019 (BTC 4K), the S2F model had a great run” (BTC 45K). For the time being, either BTC is undervalued and will soon rise in value, or S2F will become less valuable in the long run.”

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Bitcoin (BTC) price divergence from S2F trendline has led many people to question the accuracy of this model. S2F concept was challenged by Ethereum advocates including Terra’s FatMan and Ethereum educator and angel investor sassal.eth.

In addition, Vitalik Buterin noted that the S2F model has a negative value when applied to the present price of Ethereum (ETH) and the flow of ETH.