(Kitco News) - Bitcoin's price has fallen 65 percent over the year, amidst a broader Crypto Winter which has seen price collapses in various cryptocurrencies, as well as the failure of firms like FTX and Celsius. Bitcoin is currently trading around $16,500, but Daniele Bernardi, CTO of Digital Wealth, said that the price will go even lower.
"$14,500 is the bottom, but I suppose only for a few days," he said. "Next year there can be a return to growth."
Bernardi's company forecasts the Bitcoin price based on mathematical analysis which trains computer models based on prior Bitcoin price data.
"Bitcoin is extremely repetitive in the cycle, based on the halving that happens more-or-less every four years, and which cuts rewards for miners," he explained. "So basically we analyze a lot of the quant data related to this, and discovered a huge pattern in these movements."
Bernardi spoke with David Lin, Anchor and Producer at Kitco News, at the AIBC Summit in Malta.
Models and Meaning
Bernardi said that his approach is not purely "technical," but also relies upon "behavioral" components to predict future price movements.
"Bitcoin has a difficulty in finding a fair value price, because for most people it's related to emotion," he said. "If they fear, they sell. If they are engaged and think [Bitcoin] can grow, they start to purchase it."
However, he added that there are discernible patterns and drivers behind the Bitcoin price.
"We discovered in our research, which we published in Coin Telegraph, that Bitcoin pricing, in the long term, is guided by the demand," he said. "User adoption is growing, even in this [bearish] period… that means, in the long run, Bitcoin will continue to grow, even with its great volatility."
The next Bitcoin halving
Every four years, Bitcoin experienced a 'halving,' whereby the block reward that miners gain is cut in half. The next halving is slated for April of 2024.
A few months after each halving, Bitcoin's price rises, leading Bernardi to suggest that buying it just prior to the halving would be a good strategy.
"[The halving] increases the scarcity of new Bitcoin in the market," he said. "So if demand remains stable, just this is enough to push the price up."