Crypto hedge fund boss Daniele Bernardi reveals his top tips
Bernardi discusses bitcoin’s future, his quantitative model and more in our latest video
Contents
- Bernardi’s approach to investing
- Improving the stock-to-flow model
- Bitcoin’s future
- Bernardi’s cryptocurrency watch list
There are plenty of software engineers involved in the crypto space, thanks to its technical nature. Crypto hedge fund manager Daniele Bernardi, however, started off as a completely different sort of engineer: he worked with premium motorcycles.
Seven years later, he decided to make the leap into the world of finance and created his own investment advisory company for institutional clients. Since then, he started issuing cryptocurrencies, and he launched a crypto hedge fund in the Cayman Islands.
Bernardi, who has written a book, The Genesis of Crypto Assets, shared his investing advice in Currency.com’s latest video.
Bernardi’s approach to investing
Before investing in any market, investors usually consider a range of factors, such as finance statements. Bernardi argues that all the important data is in the price itself.
He told Currency.com presenter Tom Head: “We believe that the price in the market includes all the information… and so if you understand the dynamics, you can take advantage of them and you can obtain a better result with a lower risk.”
Bernardi created a database called Analyser4Crypto that uses this quantitative data. This free tool was designed for those who want to analyse the crypto market using statistical indicators.
Improving the stock-to-flow model
During his time as a crypto hedge fund manager, Bernardi has also taken other models into account.
Back in 2020, he presented PlanB’s stock-to-flow model at a conference in Venice. This is a bitcoin price prediction method that takes into consideration the scarcity of the cryptocurrency. It became famous as it fairly accurately predicted the breakout in 2021, though bitcoin’s current bearish trend is going against this model.
“This stock-to-flow model is a good attempt to understand the dynamics of the bitcoin price during the time. But of course, it is not enough, because the stock-to-flow only considers scarcity,” Bernardi said. “Today this model has to be joined by another model that considers the demand.”
What is your sentiment on BTC/USD?
Bernardi has written about new models to predict bitcoin’s price for a while now. Last year, he wrote a research paper about using quantitative models to forecast the cryptocurrency’s price. As well as scarcity, it took into account three other factors: halvings, adoption, and the mining process.
Bitcoin’s future
Bernardi thinks there is a misconception that bitcoin is comparable to a digital US dollar. Instead, he describes it as an investment asset, like gold. And just like gold, Bernardi expects bitcoin to become incredibly valuable.
According to his quantitative model, he suggests that bitcoin could hit $1m in 2035. However, Bernardi warns, there are caveats: “We actually don’t know that bitcoin has a brilliant future because of its characteristic and because of the developing markets, like in the UK, the US, Europe and so on.”
Bitcoin’s future also depends on whether it will be “substituted by another amazing project that demonstrates greater value and greater technology,” according to Bernardi.
Bernardi’s cryptocurrency watch list
When asked if any cryptocurrency could replace bitcoin, Bernardi said there are “amazing projects out there, but these, of course, are totally different”. He gave Solana as an example of one with solid technology and algorithms backing the project.
Bernardi appreciates the Terra Luna projects as well. “I would make some modification to this project for it to be perfect,” he said, but he also said there was an “incredible” future potential for the LUNA cryptocurrency.
To find out more about Daniele Bernardi’s approach to investing, watch his interview with Currency.com as part of this week’s The Crypto Culture Show.
