Bitcoin Stock-to-Flow Model and Its Proponents Under Fire Again as Failure Becomes Obvious
The Bitcoin (BTC) stock-to-flow (S2F) model created by the pseudonymous analyst PlanB is once again facing scrutiny in the crypto community, after failing completely in its price prediction so far this year.
According to the original S2F model and comments from PlanB, who now has 1.8m followers on Twitter, BTC should have reached a price of at least USD 98,000 by November last year. When that didn’t happen, PlanB came out with another prediction, saying instead that BTC will have “an average price over this halving cycle” of at least USD 100,000.
If that doesn’t happen, “S2F fails,” PlanB wrote at the time.
Now, more than six months later, BTC is trading at around USD 20,000 while we are around halfway to the next Bitcoin halving.
The failed predictions since the third Bitcoin halving in May of 2020 have already led PlanB to develop a new S2F model. This new model was shared in a tweet by the analyst on Monday this week, where PlanB also claimed that BTC is now either “extremely undervalued and will bounce back soon,” or that the model “will be less useful in the future.”
#bitcoin S2F original 2019 model (grey) and newest fit on most recent data (white dots). S2F model certainly had a good run from Mar2019 (BTC 4K) to Mar2022 (BTC 45K). For now: either BTC is extremely undervalued and will bounce back soon, or S2F will be less useful in the future pic.twitter.com/JdnLINpzTV— PlanB (@100trillionUSD) June 20, 2022
On Tuesday, a number of leading voices in the crypto community gave their two sats: for instance, Ethereum (ETH) co-founder Vitalik Buterin said that the stock-to-flow model “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,” Buterin opined.
It didn’t take long for PlanB to respond to Buterin, saying that some people “are looking for scapegoats for their failed projects or wrong investment decisions,” and that “leaders” within the community can also play victims, not just the newcomers.
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 blaming others and playing the victim. Remember those who blame others and those who stand strong after a crash. https://t.co/4nJdHq84pm— PlanB (@100trillionUSD) June 21, 2022
Seems I kicked the hornet's nest with this tweet😅 https://t.co/oVamu7GuvH— PlanB (@100trillionUSD) June 21, 2022
Others joined in on the discussion, with the long-time S2F-critic Eric Wall, the chief investment officer of crypto hedge fund Arcane Assets, posting a long Twitter thread where he shared his take on the situation.
Among other things, Wall opined that “charlatans” can easily create several anonymous identities online where each one creates a bitcoin price model, writing:
“Make 5, or why not 10 identities, maybe one will be right. It’s Disneyland for charlatans.”
Wall once again brought up the Bitcoin Rainbow Chart, a model he said has “worked exactly as well as S2F even while S2F was working.”
Meanwhile, others on Twitter also offered their two cents on the failing S2F model:
Not gonna happen. We're gonna get:— Daniel Brain (@bluepnume) June 21, 2022
– "Models always eventually break"
– "It was right for years"
– "If we smooth it out it still looks ok"
– "2 standard deviations isn't that much"
Then next bull run, we're gonna get an attempted resurrection, and people will flock back to it.
The 'Stock to flow' model is such an epic failure that PlanB should just delete his account— sassal.eth 🦇🔊 (@sassal0x) June 21, 2022
He won't though because he sadly still has 1.8 million followers who eat up all of his hopium garbage on a daily basis
People who are honest about how difficult is to predict price are not very popular. Meanwhile frauds who pretend to have special tools to accurately predict how number will go to the moon are idolized.— Alex Krüger (@krugermacro) June 21, 2022
That's why @ercwl has 90k followers while @100trillionusd has millions. https://t.co/OFkxegqHie
– ‘Failing’ S2F Model Refuels Debate on Bitcoin Price Model’s Usefulness
– BTC Rainbow Proponent Wants to Bet USD 1m that S2F Advocates Are Wrong
– New ‘Red Dot’ and Criticism Hit Bitcoin S2F Model