Ethereum creator Vitalik Buterin has once again hit out at the much-discussed stock-to-flow (S2F) price model for Bitcoin, calling it “harmful.”

Quoting a Tuesday tweet by Ethhub co-founder Anthony Sassano, who described stock-to-flow “an epic failure,” Buterin agreed that the price 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,” wrote Buterin.

What is the stock-to-flow model?

Developed by a crypto analyst going by the Twitter handle PlanB, the stock-to-flow model predicts the future price of Bitcoin based on its circulating supply relative to the amount of coins mined each year, which decreases by 50% each four years through a mechanism known as “halving.”

The model, which predicts that the leading cryptocurrency could rise to as much as $288,000 by the end of 2024, argues that Bitcoin’s scarcity—similar to that of gold and other commodities with limited supply—lays the ground for future increases in value. However, it began to clearly deviate from its trendline at the end of the last year as its…

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.
You need to agree with the terms to proceed