Vitalik Buterin criticizes Bitcoin price prediction models, "Bitcoin father" Adam Back strikes back: Ethereum's circulating supply is unknown, of course it cannot be predicted

With the upcoming Bitcoin block reward halving, the cryptocurrency community is eagerly anticipating the price changes that may result from the event. This has led to numerous price predictions for Bitcoin. Recently, Ethereum co-founder Vitalik Buterin expressed his view that 95% of these predictions are "bullshit" and engaged in a debate on Twitter with Adam Back, often referred to as the "father of Bitcoin."

Ethereum founder Vitalik Buterin first mentioned on Twitter that more than 95% of articles speculating on "what caused cryptocurrency prices to rise/fall today" are just post hoc nonsense.

Your daily reminder that 95%+ of articles of the form "event X will make crypto go (up | down)" are post-hoc rationalized bullshit. pic.twitter.com/KBQps4MF5H

— 豚林 vitalik.eth (@VitalikButerin) February 27, 2020

The trigger for this statement was when a netizen asked Vitalik about his opinion on the well-known Bitcoin price prediction model "Stock-to-Flow." Vitalik also considered this economic model to be one of the 95% nonsense articles.

The "Stock-to-Flow" model was proposed by crypto analyst PlanB. The model's main argument focuses on the scarcity of Bitcoin: as the block rewards halve every 4 years, the amount of Bitcoin entering the market decreases, leading to a significant increase in scarcity measured by the Stock-to-Flow model, thus driving up the price.

As shown in the figure below, according to this economic model, after the Bitcoin block reward halving in May 2020, its market value is expected to reach 1 trillion USD, meaning the price of Bitcoin will reach $55,000.

In addition to Vitalik's comments, cryptocurrency wallet manufacturer Trezor also mentioned in their Blog:

Predicting prices using Stock-to-Flow is completely meaningless. Bitcoin does not have inherent demand, and not everyone is attracted to the technical and economic aspects of Bitcoin. On the contrary, many people are just looking for a quick way to get rich.

Blockstream's CEO Adam Back responded to Ethereum's circulation mechanism, stating:

When your altcoin's circulation definition is unclear and will adjust due to some code engineer's sudden strange ideas, then your value certainly cannot match the Stock-to-Flow model.

Adam Back emphasized in the end here, that under the same conditions (same demand), halving the supply will drive up prices, which seems to be a logical inference.

Further Reading

• Finnish Customs Forced to Become Bitcoin Hodler, Confiscated Bitcoins Have Increased 20 Times
• Data Review of Ethereum's Historical Developments: Number of Addresses, On-chain Transactions, and Distribution of Holdings, etc.

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