In his latest article, PlanB has re-affirmed the reliability of his Bitcoin-Stock-to-Flow model (S2F) to forecast the Bitcoin price trajectory. He also asserts that BTC markets are reasonably efficient, and they see risks that are not in the price data.
PlanB: Markets Are reasonably efficient
In his article of January 17, 2020, PlanB makes a case for his S2F as a reliable Bitcoin price forecast tool against the Efficient Market Hypothesis (EMH), and the classic risk and reward model.
The S2F model, introduced in March 2019, is based on Nick Szabo’s premise of “unforgeable scarcity,” which PlanB describes,
“S2F is a measure of scarcity. The power-law relation between S2F and bitcoin price over time captures the underlying regularity of bitcoin’s complex dynamic system of network effects as described by Trace Mayer.”
Trace’s Bitcoin network effects include 1. Speculation, 2. Merchants, 3. Consumers, 4. Security, 5. Developers, 6. Financialization, and 7. World Reserve Settlement Currency.
On the other hand, EMH stems from the…