Plan B Bitcoin model an ‘epic failure’

Plan B Bitcoin predictions might be a thing of the past.

Astute observers, including none other than the founder of Ethereum Vitalik Buterin, are tearing shreds off Plan B’s ‘stock-to-flow model’, which appears to be falling apart.

“The ‘Stock to flow’ model is such an epic failure that Plan B should just delete his (twitter) account,” said the Daily Gwei founder Anthony Sassano.

“He won’t though because he sadly still has 1.8 million followers who eat up all of his hopium garbage on a daily basis.”

Vitalik Buterin has Tweeted: “stock-to-flow 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.”

Plan B Bitcoin
Vitalik Buterin says this graph shows things are “not looking good” for the Plan B Bitcoin model.

Who is Plan B?

Plan B is a Dutch Bitcoin analyst, who claims to have 25 years experience as an institutional investor, but chooses to remain anonymous.

He first became known by the pseudonym ‘Plan B’ when he released a paper in early 2019 that attempts to model Bitcoin’s price based on the stock-to-flow model.

Plan B Bitcoin
A chart showing Plan B’s stock-to-flow model.

What is Plan B’s stock-to-flow model?

Plan B created his stock-to-flow model after reading the book “The Bitcoin Standard” in 2019.

His model uses the ratio between the existing supply of Bitcoin and the new supply of Bitcoin to estimate future prices of the currency.

He says it is possible to predict such ratios with great accuracy, because the amount of new Bitcoins being added into circulation through mining is constant.

Unlike gold, Bitcoin’s rate of supply increase will always decrease, before eventually reaching zero once the currency’s cap of 21 million coins is hit.

The number of new coins being mined halves every four years, significantly reducing the number that are being created.

The most recent Bitcoin halving took place in May 2020, with a significant increase in the Bitcoin price following just a few months later.

Plan B created his stock-to-flow model in March of 2019 when the Bitcoin price had fallen below $4,000 from the 2017 high of $2,000.

At that point, many observers were predicting Bitcoin to plummet further to $1,000, but Plan B’s stock-to-flow model was telling him the only way was up.

“(I thought) we have to go up from here … and we have to go up to the $1 trillion market cap,” he told the Unchained podcast.

Bitcoin hit the $1 trillion market cap milestone in February of 2021.

Plan B Bitcoin model suddenly on life support

Earlier this year, Plan B said on Twitter that the world’s largest cryptocurrency was on track to hit US$100,000 in 2023.

“Both (my) stock-to-flow models and logarithmic regression point to $100k in 2023,” he said.

But then, Plan B has confessed to holding Bitcoin from $69,000 all the way down to its current level.

“On days like this I switch off the monitors and go for a run,” the former institutional investor said.

“Yes I hodled from 69K to 22K, did not sell a sat, because I thought BTC would go to 100K. But no reason to stare at screens all day. Best to switch off, do something you like and come back in a week or so.”

Plan B has posted charts which he says indicate Bitcoin is “oversold” and another that he says shows the world’s largest digital currency is “still rising exponentially.”

“Do not worry about me, I am in BTC since 2015, all is well,” Plan B said.

“Drop from 69k to 21k is unrealized loss, just like pump from 9k to 69k was unrealized profit.

“No loss if you do not sell. I will ride BTC to $1M or $0!”

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