Vitalik Buterin criticizes the popular BTC valuation model

Vitalik Buterin returns to the top of the portals that write about cryptocurrencies Why? Well, he openly criticized the popular BTC valuation model.

How to price BTC?

The subject of how to value something as new as Bitcoin is as old as… well, as Bitcoin himself. Many commentators are of the opinion that BTC is still cheap, others think that the current level is already absurdly high. Anyway, today, it’s not clear how to value 1 BTC rightly.

“But what we are witnessing is the birth of “network money.” Its value is due to how many people believe it has value. Web effects, most Internet users only know from virals on YouTube. Historically, only a small group of investors from Silicon Valley could feel the network effects on their own. Now this risk profile and possible return on investment is available to everyone.

– Maciej Ołpiński, co-founder of userfeeds, a platform for algorithms evaluating content based on tokens and blockchain, told SpidersWeb over two years ago.

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One of the most popular valuation models is the so-called Stock-To-Flow. It refers to the existing supply of Bitcoins compared to the number of new units introduced into circulation. Thus, given the expected halving, it could be concluded that the price for 1 BTC will increase significantly when the distribution of the miners’ reward becomes a reality.

Buterin and the popular BTC pricing model

However, the co-founder of Ethereum (ETH), Vitalik Buterin, believes that this model is not appropriate. Admittedly, he must enjoy the bulls of the stock exchange, because it follows from him that the price of BTC should rise to $100,000 between 2021 and 2024, but in his opinion it is “nonsense”. He believes that over 95% of forecasts that assume that “event X will make the cryptocurrencies price go (up / down) is rationalized nonsense”.

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“There’s no need to wrap it up. Using Stock-to-Flow to predict prices is absolute nonsense:

– summarized Buterin.

What do you think of that crypto pricing?

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