To recap, Stock-to-Flow is a model of Bitcoin’s estimated rate development, taking into account the cryptocurrency’s limited supply. However, the maximum number of coins is limited to 21 million, in addition the rate of issuance falls by half approximately every four years due to the so-called halving.

The Stock-to-Flow model

You can notice here that the model essentially predicted Bitcoin to reach the $100,000 mark by the end of 2021. As we know, the high of BTC in November 2021 was $69k, followed by a collapse. Consequently, the model turned out to be false.

As a result, Bitcoin’s chart has deviated significantly from the value predicted by Stock-to-Flow in recent months. With that in mind, Ethhub platform co-creator Anthony Sassano called the model an “epic fail” – and most interestingly, Etherium creator Vitalik Buterin agreed with his opinion. The latter stressed that such forecasting tools often turn out to be bogus, so investors should not rely on them alone.

Why Bitcoin rate predictions don’t work

Here’s Buterin’s quote from Twitter, published by news outlet Decrypt.

Stock-to-Flow is really not looking good right 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 predetermination that an asset will rise are harmful and deserve ridicule.

Deviation of Bitcoin’s price from its implied value by the Stock-to-Flow model

The PlanB model assumes that a Bitcoin deficit, similar to that of gold and other supply-constrained assets, lays the groundwork for future growth in value. However, as we have already noted, late last year the Bitcoin exchange rate began to clearly deviate from the Stock-to-Flow trend line. In addition, the $100,000 price predicted by the model has still not been reached by today.

PlanB has already responded to the criticism with the following quote. The quote is cited by Cointelegraph.

After a crash, some people are looking for scapegoats for their failed projects or poor investment decisions. Not only newcomers but also “leaders” fall victim to blaming others. Remember those who blame others and those who remain strong even after a market collapse.

We think that mentioning "failed projects" in the context of Vitalik Buterin is an altogether silly accusation. Besides, Vitalik doesn't invest much: the last time he talked about an old DOGE purchase was in June 2021. Therefore, the remark is completely irrelevant and is just a desire to justify his failed creation.

Subscribers have made it clear that Vitalik Buterin’s comment comes down to the danger of presenting something as due and something that is bound to come true. That is, while PlanB may not have urged readers to invest in Bitcoin for the sake of waiting for $100,000, such growth prospects followed from his model. And so, in theory, many newcomers could have invested in crypto precisely on those expectations.

Buying cryptocurrencies

Another comment from PlanB – his model is allegedly “too crude”, i.e. it doesn’t take into account macroeconomics, events like pandemics, geopolitical conflicts and so on. At the same time we believe that these are just attempts to justify – if the spread in price forecasts reaches tens of thousands of dollars for an indefinite period, then why use such tools at all?


We believe that such replicas of PlanB are just attempts to maintain its relevance in the cryptocurrency community. However, in essence, its popularity stems precisely from a model that has already failed utterly. Naturally, economic conditions around the world are far from ideal right now, but that does not justify the failure of the model. So, in this case, the only thing left for the "analyst" to do is to dissolve: no one will likely believe in his new model of Bitcoin's price.


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