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Debunking the Fake and Deceitful PlanB Stock-To-Flow Bitcoin Model

CryptoWhale
CryptoWhale
You may be shocked to hear that the magical rainbow model that was invented by a pseudonymous Bitcoin maxi isn’t actually legit.
This model is inherently flawed and was created for one main purpose. To lure in retail suckers at overvalued prices by building the false narrative that prices will continue rising forever using irrelevant data.
The stock-to-flow model, popularized by a pseudonymous Dutch institutional investor who operates under the Twitter account “PlanB,” has been widely praised and is the leading valuation model for bitcoin maximalists.
Despite rarely being right, the model has achieved viral popularity and inspired rags-to-riches dreams for those gambling it all on the future of bitcoin. However, we believe the model’s accuracy will likely be about as successful at forecasting bitcoin’s future price as the astrological models of the past were at predicting financial outcomes.
Stanford Professor Paul Pleifderer once coined the term “chameleons” to describe models that are built upon dubious assumptions and are given more credence than they deserve. An initial evaluation of any model should begin with a critical look at the model’s theoretical assumptions, he says.
Chameleons are particularly difficult to spot and dispute because they appear to be meaningful. It’s only under further scrutiny that you realize they are built upon assumptions that do not map to what we know about the real world.
The Model is Completely Flawed
A few conceptual mistakes of the model are the following:
  1. The S2F model looks at historical data and uses this to predict the future. Everyone with any knowledge in finance knows that past performance is not an indicator of future performance. Also, the data range has been selected by the researcher (if you can call him that) to suit his own model. It is not ‘randomly selected data’ nor has this model ever been validated for any other asset. For example, the price of gold is not correctly predicted with the S2F model. This is relevant because the researchers draw similarities between gold and bitcoin yet fail to mention this fact.
  2. The bitcoin price is not dictated by the supply-side at all. It is in fact the demand side that dictates the price of bitcoin. As the supply of bitcoin decreases, the effect it will have on the market will further and further decrease. In fact, the effect of the 4-year halving cycle should also decrease as time goes on. The model assumes as if the only coins for sale are those that are minted by miners, but this is complete BS of course.
  3. The role of miners has reduced significantly, once they earned 50% of the market cap and influenced the price heavily, now miners earn only 1.7% of the market cap limiting their effect on the price.
Another thing worth mentioning is how this model has rarely ever been right. In fact, the creator has adjusted his model over 114+ times to fit his or her deceptive narrative.
PlanB claims that Bitcoin will hit $450,000 in 2021, and his worst-case scenario is $135,000. Based on demand inflows, and narrative shifts, I will say with 100% confidence that neither of these predictions will happen.
This model will go down as the least accurate model in history.
In addition to the conceptual mistakes listed above, An associate professor was invited to a bitcoin conference and completely destroyed the S2F model. With only 800 views, it’s clear many aren’t aware of how this model has already been disproven. You can watch the video here.
Vitalik Buterin on the PlanB Model
One of the most vocal critics has been Ethereum co-founder Vitalik Buterin.
In a tweet, he argued: “the ‘halvings cause BTC price rises’ theory is unfalsifiable: Was the peak before the halving? Then it ‘rose in anticipation of the halving’ During? ‘Because of the halving’ After? ‘Because of…’ The last $20k peak was near the halfway point between the 2016 and 2020 halvings.”
vitalik.eth on Twitter: "The "halvings cause BTC price rises" theory is unfalsifiable: Was the peak before the halving? Then it "rose in anticipation of the halving" During? "Because of the halving" After? "Because of..." The last $20k peak was near the halfway point between the 2016 and 2020 halvings.… https://t.co/Dy8QX1xrZd"
Put simply, Buterin thinks that the theory is impossible to disprove, analysts can attribute any price as evidence that the stock-to-flow model is correct. Thus, it’s not particularly helpful.
This is why the PlanB model is dangerous and deceptive for the crypto community. He will continuously manipulate the data to fit his narrative regardless of how inaccurate and flawed the model truly is.
Of course, many Bitcoin maxis know this but choose to ignore it. The model provides them with another false narrative they can use to promote their cryptocurrency to retail investors who don’t know any better.
PlanB Blocks Anyone Who Even Questions Him.
Bitcoin maximalists love to talk about how they’re anti-censorship, but everyone knows this is hypocritical. They love censorship.
If you’ve ever asked a question or had a concern regarding the PlanB Bitcoin model, there is a 99.99% chance that he blocked you. I’ve encountered hundreds of pages who’ve told me they’ve been blocked for simply asking a question like “Is the model still valid?”
The creator of this model is a fraud. He refuses to be wrong, which is why he continues to deceive the crypto community, and censor anyone who even questions his legitimacy.
Even on many Bitcoin Reddit forums, questioning this model results in your posts being deleted. Bitcoin maxis can’t admit that they’ve been actively deceiving the public with lies.
When He’s Wrong, He Simply Changes it.
PlanB confirms that if Bitcoin fails to hit $100,000 by 2021, his model will officially be invalidated. With only a limited amount of time left, watch closely for next year when he re-adjusts the model.
Many don’t know this, but PlanB has released several models. Anytime one is wrong, he simply creates a new one. Anything to prolong his scheme.
He will 100% create a new fake model after this one. Screenshot this.
Deceptive Marketing piece
Darrell Huff wrote in “How to Lie with Statistics”: “Many a statistic is false on its face. It gets by only because the magic of numbers brings about a suspension of common sense.” Upon reflection, few would take seriously the idea that gold’s USD price is a function of its own supply rate and therefore so is bitcoin’s. Yet, the supposed mathematical precision presented in the paper has resulted in the S2F model continuing to be heavily promoted in both retail and professional investment channels.
Investors should be highly skeptical of this model even if they believe bitcoin is digital gold. The model paper is not a proper empirical analysis but is more akin to a marketing piece in which the author is trying to convince readers that bitcoin is going to be worth a lot more tomorrow.
Thank you for reading!
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CryptoWhale
CryptoWhale @cryptowhale

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