According to Ethereum founder Vitalik Buterin, it is impossible to prove whether Bitcoin’s supply cuts lead to price appreciation.

Ethereum co-founder Vitalik Buterin said he did not participate in the widely quoted Bitcoin Stock Flow (S2F) model, published for the first time by Dutch analyst PlanB in March 2019. However, he also admitted that the fact that there was no consistent correlation between price increases and Bitcoin quadruple supply cuts was not enough to refute the model.

Inconsistency arouses suspicion

Miners’ earnings were reduced to 6.25 BTC with a 50 percent reduction in rewards after the Bitcoin split on May 11.

Overall, this event is believed to have led to a significant price change so far. From July 2016 to May 2019, BTC increased by 250 percent. Prior to this, during the first four-year cycle that began in November 2012, it had risen by almost 7 thousand percent. Still, according to Buterin; The inconsistency of Bitcoin price increases makes the popular theory ‘wrong’.

This actually means timing makes it difficult to prove or refute it. For example, the king of cryptocurrencies reached an all-time high of $ 20,000 between 2016-2020.

Many People Criticize S2F

Bitcoin’s S2F model predicts that the price should rise significantly after each reward cut. In fact, Bitcoin’s annual inflation rate is now below substantial gold.

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However, except for Bitcoin bulls, this model is very much skeptical. Many sections question the reality of this model.

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