It seems that during the period when the market is falling into a “hibernation” cycle, Ethereum founder Vitalik Buterin has become more active with the community as he continuously makes comments on all topics related to the money industry. coding, this time about PlanB’s Stock-to-Flow (S2F).
Most recently on June 21, the Ethereum founder directly criticized the controversial Stock-to-Flow (S2F) model popularized by PlanB, who was confident Bitcoin would hit $100,000 by the end of 2021 when applying this analysis to the price of BTC. However, reality shows that Bitcoin has not lived up to PlanB’s expectations.
The S2F model is based on quantifying the price of an asset because of its scarcity and is mainly used for common metals such as gold and silver. So PlanB has also taken advantage of Bitcoin’s limited supply of 21 million units to reflect that the price of BTC will continue to climb steadily and impressively with approximately ten times return after each repeated bull cycle after four years.
However, the key problem with the S2F model that many critics have pointed to is the one-way estimate, where S2F only takes into account the supply side of BTC while rejecting assumptions from macro factors, an unexpected breakdown occurs in the market or a decrease in user demand.
Surprisingly, not long after that, PlanB responded to Vitalik Buterin’s criticisms with an equally harsh attitude.
Perhaps S2F can also be applied in the story of market fluctuations according to supply and demand, but unexpected events like Terra or the Fed are very difficult to predict. However, it must also be noted that BTC has also recovered from the most recent typical crisis, the COVID-19 pandemic.
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