Key Takeaways:
- The Swan team collectively accuses PlanB’s S2F of invalidity and himself of fraudulence
- In turn, PlanB considers these accusations to be overboard and personal more than anything.
- The S2F model caused and caused diverse opinions to this day.
YEREVAN (CoinChapter.com) — Crypto Twitter can be vicious, to say the least. CEO of Bitcoin investment platform Swan, Cory Klippsten, hurled accusations at long-time analyst PlanB. He blamed PlanB that his Bitcoin prediction model Stock-to-Flow hurts the Bitcoin ecosystem of crypto.
So let’s find out what this S2F model is, what Klippsten and his team accuse PlanB of in detail, and what we can make of this.
What is Bitcoin Stock To Flow Prediction Model?
The cryptocurrency space, particularly Bitcoin, sometimes uses the Stock-to-Flow (S2F) quantitative model in order to predict the price of Bitcoin.
It was developed by a pseudonymous Twitter user and quant analyst named “PlanB” in March 2019. This model evaluates a cryptocurrency’s scarcity and value by analyzing its production rate (flow) relative to its existing supply (stock).
The S2F model’s main premise holds that an asset’s value heavily depends on its scarcity. To determine scarcity, one compares the rate of new supply entering the market (flow) to the total existing supply (stock).
This concept finds common application in traditional finance with precious metals like gold, where annual production remains relatively small compared to the overall existing supply.
In the case of Bitcoin, analysts calculate the Stock-to-Flow ratio by dividing its total existing supply (stock) by the annual new supply created through mining (flow). Since Bitcoin’s supply is capped at 21 million coins, it is widely considered a deflationary asset, making it scarcer than fiat currencies that have no such supply limit.
The Goal Of Bitcoin S2F
According to the S2F model, Bitcoin’s scarcity should result in its value increasing over time. In particular, after significant supply-altering events like the halving.
The Bitcoin network undergoes a halving every four years, reducing the number of new bitcoins mined per block by half. This event contributes to decreasing the rate of new supply entering the market. In turn, increasing the scarcity and potentially driving the price higher.
Proponents of the S2F model argue that historical data and Bitcoin’s price behavior seem to align with the model’s predictions. However, we must note that the S2F model is a theoretical model based on historical observations and statistical correlations. It cannot account for all factors influencing the cryptocurrency market.
Critics of the model highlight that the cryptocurrency market is highly complex. Since it is influenced by macroeconomic conditions, technological developments, regulatory changes, and market sentiment, therefore, a quantitative model cannot provide all the answers a be a definitive way to predict the BTC price.
The Accusations Themselves
Swan CEO Cory Klippsten came forward on Twitter to criticize the S2F model by calling it “So So Fake”. However, Klippsren acknowledges that either way, it’s a tolerable starting point for people for want to study Bitcoin, even if S2F is a “false narrative.”
Reminder that S2F models were NEVER valid. If a false narrative helped get you into Bitcoin, we’re still glad you’re here. Now it’s time to do the much harder work of understanding Bitcoin (always and forever a work in progress). https://t.co/NSDRK3PekT
— Cory Klippsten | Swan.com
#Bitcoin (@coryklippsten) January 26, 2022
Furthermore, Klippsten states the S2F model was a “major” hurdle in the mass adoption of Bitcoin and a waste of time. Additionally, Klippsten called the model “worthless garbage” and also accused PlanB of promoting scammy casinos and of being a charlatan.
Statistically invalid models like S2F are a waste of everyone’s time AND have caused dramatically negative effects on Bitcoin adoption. https://t.co/Fv1ztFYNL8
— Cory Klippsten | Swan.com
Steven Lubka, Managing Director at Swan, accused Bitcoin enthusiasts of using the acceptance of the S2F model to frame them as “illiterate hopium dealers.” Moreover, Lubka called the S2F model a “shitcoin marketing narrative”
S2F is a shitcoin marketing narrative, it distracts from the understanding that price comes from the fundamental value generated by system – #Bitcoin as a whole, is why #Bitcoin has value
And instead conditions people to think ponzinomic supply adjustment drives pumps
— Steven Lubka (@DzambhalaHODL) July 20, 2023
Bitcoiners acceptance of S2F has been used for years to paint the community as statistically illiterate hopium dealers by its opponents
It created the Ethereum ultrasound money meme, it spawned an entire generations of scams like Safemoon (ideologically by proving people would…
— Steven Lubka (@DzambhalaHODL) July 20, 2023
PlanB Responds Back
The analyst responded back on Twitter by saying that the Swan team attacked him by calling him a scammer, fraud, shitcoiner, etc. PlanB noted that these passive-aggressive and borderline abusive tactics only show the true “feathers” of the Swan Team.
The entire swan-team attacked me today, calling me fraud, scammer, fake, shitcoiner.
Pls know that all my content is free, I never ask for money, and I never bought shitcoins.
I guess this is how swan operates today, ad hominem & dirty. Beware if you do business with swan (KYC)! pic.twitter.com/Ioh2OU8rT0— PlanB (@100trillionUSD) July 20, 2023
Furthermore, some parts of Crypto Twitter took on to defend PlanB. Their argument is that models like S2F are not perfect and cannot provide all the answers. Yet, S2F can offer some guidance in the grand quest to predict the price of BTC.
Thank you Willy, well said. Swan team calling me a scammer, fraud, fake, shitcoiner just because they do not like my model shows they don’t know what models are, or they are farming engagement for their KYC business with ad hominem attacks. Either way, swan is showing true…
— PlanB (@100trillionUSD) July 22, 2023
The post Swan CEO Attacks Bitcoin Analyst PlanB Over Underperforming S2F Model appeared first on CoinChapter.
