Bitcoin is meant to be one of the most productive acting assets of the year, despite a recent retraction, but that hasn’t stopped Bitcoin bulls from fighting on Twitter.
The value of bitcoin has soared for much of 2020, adding about 40%, with the bullish stock flow style, predicting a large bitcoin value of $288,000 through 2024, functioning “like a clock”, according to its anonymous creator.
However, several high-level Bitcoin analysts and marketers clashed last week with stock flow style, and the anonymous PlanB accused his critics of unmasking him and his style was ridiculed as “absolutely useless. “
“The stock-to-flow style is based on the maximum basic mistakes that surely render it useless,” warned Alex Kruger, an economist and cryptocurrency analyst, speaking on the phone.
The stock-to-flow pricing model, created through Twitter’s anonymous user PlanB, who claims to be a Dutch institutional investor with legal and quantitative education in finance who manages about $100 billion in $100 billion in assets and tweets, calculates a share in the offering of an existing asset relative to the amount that is put into circulation.
Commodities such as gold, with an inventory/flow ratio of 62, meaning it would take 62 years of gold production to obtain existing gold inventory, have a higher inventory/flow ratio and are appreciated by investors for their rarity. Cash has a 22-year inventory-to-flow ratio for its production to succeed in existing cash inventory.
Bitcoin’s stock-flow ratio is now 50 after the third cut to half of Bitcoin earlier this year, which saw the number of bitcoins rewarded to those whom the bitcoin network, called minors, halved from 12. 5 bitcoin to 6. 25.
However, Kruger, along with many other analysts in recent months, warned that the style is based on erroneous comparisons and a “misleading relationship” between value and scarcity.
“The total style is based on the erroneous assumption that there is a cointegration [a long-standing dating between two or more variables] between value and scarcity,” said Kruger, who explained that without cointegration, it is “absurd to think that the action – to-flow bitcoin, a number that increases through programming, and everyone knows what it will be at any time that the Array can be used to wait for the value. “
Criticism of the stock-to-flow style and its author recently exploited, with the executive leader of the Swan Bitcoin bitcoin buying app, Cory Klippsten, publishing what PlanB thought of as identification data on Twitter before deleting it and claiming that it was “wrong to publish” non-public data “on PlanB and users of bitcoins without a load name deserve the right” to remain anonymous. “
“It’s incredibly vital to be positive for the right reasons,” Klippsten said on Twitter, explaining his opposition to popularizing the stock-to-flow model. “Otherwise, you will have weak hands when your trust is proven to be false. “
Klippsten, speaking on Telegram, said he supported the stock-to-flow pricing style until a few months ago, when he “examined the styles and found that they were invalid” and “have no predictive power. “
According to PlanB, which questioned Klippsten’s credentials, the flow-to-flow inventory pricing style shows that bitcoin will succeed at $288,000 before the next half-bitcoin reduction in 2024. PlanB also argued that assets with the highest inventory debit have a higher value, indicating gold, silver, diamonds, and real estate on a chart posted on Twitter.
Meanwhile, PlanB downplayed the precision of the style, noting this year’s previous thing: “A style is a simplification of reality, and all styles are wrong, but some are useful. “
Elsewhere, others supported PlanB modeling, not as a value predictor as a trend.
“You have to think of the $100 trillion S2F style like Moore’s Law: it’s just a speculative projection that an observed trend can continue,” said Adam Back, founder and CEO of the Canadian corporate Bitcoin and Blockchain Blockstream generation, via Twitter. referring to Moore’s projection that the number of transistors in microprocessors would double every two years.
“[stock flow style] predictions should not be considered as an accurate estimate,” Bitcoin analyst Nick Emblow said via Twitter. “What style does is give us evidence to show that [the flow of stocks] is a vital variable factor in understanding the price of bitcoin. “
However, critics of the stock-to-flow model, adding Alex Kruger, are convinced.
“The good thing about the style is that it’s open,” said Kruger, who fears that planB stock flow research will be used to convince others to invest in Bitcoin with the promise not to waste their money. “You can press the deadline, until you find what you’re looking for. “
“True believers will stay [their bitcoin] no matter what. There are others that will be destroyed when the style is completely extinguished and will check its losses. “
I am a journalist with significant experience in the fields of technology, finance, economics and business around the world. As founding editor of Verdict. co. uk, I pointed out that