Vitalik Buterin, cofounder of the Ethereum blockchain ecosystem, believes that popular methods for predicting the value of securities are not suitable for cryptocurrencies.

Vitalik Buterin criticized analysts using the popular stock-to-flow model to predict the price of bitcoin. According to this model, from 2021 to 2024, bitcoin should go up to $100,000.

“Your daily reminder that 95%+ of articles of the form "event X will make crypto go (up | down)" are post-hoc rationalized bullshit,” Buterin tweeted attaching to his tweet screenshots of several articles predicting the influence of coronavirus on the bitcoin price.

When asked whether the stock-to-flow model is included in those 5% that are not nonsense, Buterin noted that he included this model in those 95% that he considers stupid. Buterin did not specify what 5% of forecasts are not rubbish.

Nevertheless, until recently, the stock-to-flow model was quite accurate in predicting the growth of bitcoin and, according to it, the first cryptocurrency currently should be traded at $8600, which generally reflects the actual situation in the market.

Stock-to-flow is defined as a relationship between production and current stock that is out there. The stock-to-flow is the number that we get when we divide the total stock by yearly production (flow). The stock-to-flow (S2F) model appeared in March 2019, and according to this concept, bitcoin can grow sharply, especially after the halving, which will happen in May of this year. It is based on Nick Szabo's concept of the rarity of bitcoin, which affects the price of cryptocurrencies in accordance with the effects of the network described by Trace Mayer.

According to Mayer, bitcoin is a strong currency: it thrives on the internet; it frees its users from third parties; it saves merchants money; it is deflationary; its code can be audited by all; its developers work tirelessly to improve upon it.