The second-largest cryptocurrency, Ethereum is currently trading at $390.99 and is down by -3.22% in the last 24 hours. On August 17th, ETH reached an intra-week high of $441.79. However, a renowned cryptocurrency analyst, who is famous by the name ‘Plan B’ has taken over Twitter and explained as to why Ethereum cannot be as precious as Bitcoin. He is mainly known for his knowledge on the stock to flow model for Bitcoin.
Plan B Couldn’t Determine the Relationship Between the Values of ETH’s S2F
Recently, Plan B tweeted that he tried to analyse the Ethereum stock to flow value but couldn’t find any which to him was logical. He also added that unlike Bitcoin, Ethereum’s supply can be changed and is not scarce. Hence, serious investors are well aware of this fact and should not fall into the trap of the recent ETH2 narrative. Concluding he elaborated that Ethereum must have value owing to its utility and not scarcity.
What is Stock to Flow (S2F) and What is ETH’s S2F Value?
Stock to flow refers to the ratio of stock to the flow of the company. Stock is the total size of the company’s reserve and flow is the yearly production. Currently, Gold has the highest SF which is 62 and that of BTC after the third halving is 50. The SF of Ether is expected to reach 58.5 by the year 2022 and currently, it is 28.5.
Plan B believes that the main reason why he couldn’t determine ETH S2F’s value relation was because Ethereum is not scarce and doesn’t have a fixed supply unlike Bitcoin.
Plan B’s tweet was again a response to Alex Saunders where he mentioned two EIPs who have suggested reducing ETH’s block reward from 2 to 1 or 0.5. He has also updated his stock to flow model for Ethereum.
Plan B Clarifies why he Isn’t a Big Fan of ETH
Plan B is clear about his stance on ETH and it seems like he isn’t a big fan of the crypto. He mentioned the drawbacks of ETH in another tweet. He emphasized that since he cannot run a node on ETH by himself, he needs to depend on some other entity (a third party to be specific) to determine the total ETH present. Since, ETH has a lower hashrate than that of BTC, hence it is considered less secure. He has stressed upon the fact that if ETH can reduce the supply of the tokens then it is also possible that ETH can expand the supply as well.
