Ethereum Founder Vitalik Buterin Talks Stock-to-Flow, PlanB Responds


Alt heading: Has The Stock-to-Flow Model Lived Out Its Days? Ethereum Founder Shares Thoughts /// PlanB Finally Agrees with Ethereum Founder that S2F May Be Outdated ///

Ethereum co-founder Vitalik Buterin took to Twitter and told his 4 million followers about what he thought of the stock-to-flow (S2F) concept. In the words of the 28-year-old programmer, S2F is “really not looking good right now.”

For the uninitiated, the stock-to-flow model is a concept that predicts the future price of a commodity-based on its scarcity. This concept was applied to predict the price of precious metals such as gold and silver. However, it was used to Bitcoin by the famous anonymous trader, Plan B, who has since been credited as the creator of Bitcoin’s S2F model. According to reports, PlanB is a former Dutch institutional trader with more than 20 years of expertise in the financial industry.

This is not the first time the Ethereum chief has shot at the S2F concept. In June 2020, exactly two years ago, Buterin dubbed the model “unfalsifiable,” contending that its sheer construction rendered it difficult to refute. He later affirmed his position by saying that he disagreed with the model in its entirety.

Some people replied to the Ethereum founder’s post by saying that a significant issue with the S2F model is that it does not consider demand, although it is a good measure for scarcity.

Another user pointed out that the S2F model did not anticipate an inflation period like the one we find ourselves in currently.

Bitcoin’s S2F creator also shared his thoughts on Twitter. The anonymous trader said that S2F had a good run from March 2019 to March 2022. Right now, either BTC is drastically undervalued and will quickly recover, or S2F won’t be as valuable going forward, the trader said.

However, regarding the Ethereum co-founder’s comments, Plan B did not take them all too lightly. He quickly responded that some individuals hunt for scapegoats after a crisis for their failing ventures or poor investment choices.

The S2F model predicts that Bitcoin could soar to $288,000 by 2024. This number is very close to what many BTC maximalists envision the currency will touch. However, many do not share the same opinion.

At press time, Bitcoin (BTC) traded at $21,350.11, up by 3.8% in the last 24 hours. Meanwhile, Ethereum (ETH) traded at $1,167.91, up by 3.5% in the previous 24 hours.