Vitalik Buterin Criticizes Stock-to-Flow (S2F) Model and Is Hit by PlanB

Since its inception, the stock-to-flow (S2F) financial model has received both praise and criticism from investors. Programmed to predict Bitcoin’s price, the model eventually strayed from reality during the latest market crash, which caught the attention of Vitalik Buterin.

For the creator of Ethereum, S2F not only looks bad at the moment, it also promotes a false sense of certainty about the future, which can be detrimental to both investors and the market itself.

In his defense, PlanB, the creator of the S2F model, accused Buterin of being a victim while looking for culprits for the current downtrend in the market.

Vitalik Buterin Attacks Stock-to-Flow Model

Despite being one of the most recognized names in the industry, Vitalik Buterin remains skeptical on many counts. One of these is the stock-to-flow (S2F) financial model created by PlanB, which points to a major increase in Bitcoin price.

Such a model had already been criticized by other experts for being “scientifically invalid”. However, the recent slump in the markets seems to have put this to rest as S2F has distanced itself from reality, as pointed out by Buterin.

“Stock-to-flow doesn’t look very good right now.”

“I know it’s rude to brag and stuff, but I think financial models that give people a false sense of certainty and predestination that the numbers are going to rise are harmful and deserve all the ridicule they get.”

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 rise are harmful and deserve all the ridicule they get. https://t.co/hOzHjVb1oq pic.twitter.com/glMKQDfSbU

— vitalik.eth (@VitalikButerin) June 21, 2022

Then, Buterin uses Ethereum itself in the model, pointing out that the results are grotesque. In addition, it also asks people to remember who supported and mocked the model, even if it felt right.

“Remember who supported S2F and who made fun of it, even if it seemed to accurately describe the trendline.”

PlanB strikes back at Ethereum maker

Hurt by Vitalik Buterin’s criticism, the stock-to-flow creator also used social media to defend himself, or rather, to counter-attack.

For PlanB, Buterin would play the victim while his cryptocurrency is in free fall like Bitcoin. He goes on to note that investors are responsible for their own decisions.

“Some people look for scapegoats for their failed projects or bad investment decisions after a crash.” he is writing PlanB on Twitter. “Not only rookies, but also ‘leaders’ are victims of blaming others and playing the victim. Think of those who blame others and those who stay strong after an accident.”

According to stock-to-flow, Bitcoin should be worth more than $110,000 right now, but its true value is close to $21,000. Despite this, the chart has shown similar results in the past, especially during bullish periods.

Finally, S2F points out that Bitcoin will reach $1 million per unit by 2025, i.e. in less than four years. We can only wait to find out if this prediction is correct or if Vitalik Buterin is right in this discussion.