The countdown to the next Bitcoin halving event has begun, and many analysts and investors are expecting it to push the price of Bitcoin to new heights. Some even believe that Bitcoin could surpass $100,000 after the halving. However, there are several factors that cast doubt on these predictions in the short term, such as the lack of fresh inflow to the crypto market, ongoing macroeconomic challenges, and Bitcoin’s recent price action below $30,000.
In a recent interview with Paul Barron, Hut 8 vice president Sue Ennis shared her perspective on how the Bitcoin price could reach $100,000 in the coming year and how the halving will impact BTC miners. Hut 8, a leading Bitcoin mining company, currently holds 9,152 BTC in reserve, with 8,305 unencumbered. The company’s installed ASIC hash rate capacity is 2.6 exahashes per second, and it mined 44.6 BTC in July.
During the interview, Barron raised concerns about the rising Bitcoin difficulty for miners and its potential to create sell pressure against BTC. He pointed out that spikes in Bitcoin difficulty have historically been followed by price drops. Barron questioned whether miners were selling Bitcoin in anticipation of the upcoming halving, which would require more efficient ASICs, and if this would dampen the pre- and post-halving price surge anticipated by investors.
Ennis responded to Barron’s concerns by highlighting the unprecedented dynamics in the mining industry. Despite Bitcoin’s price trading within a certain range, hash rate continues to increase. Ennis emphasized that there is a significant influx of new entrants into the global Bitcoin network, especially in the Middle East where six gigawatts of nuclear and renewable energy are being generated. Governments in the region are exploring Bitcoin mining as a viable option, leading to a surge in hash rate that is somewhat price agnostic. This stands in contrast to publicly traded American miners who operate differently.
To survive after the halving, Ennis suggested that miners need to diversify their revenue streams and not solely rely on mining Bitcoin. This could involve exploring applications of artificial intelligence (AI), dedicating rack space to GPUs for AI training, offering industrial-level ASIC repair services, or participating in demand-response initiatives with energy producers and distributors.
Furthermore, Ennis addressed the anticipation of a Bitcoin exchange-traded fund (ETF) and its potential impact on the price. Despite delays and denials in the past, Ennis believes that the approval of a spot Bitcoin ETF by the U.S. Securities and Exchange Commission would be bullish for the asset class. However, she cautioned that such an approval could create sell pressure on miner equities since mining stocks are often seen as a proxy investment to Bitcoin.
Ennis also shared her thoughts on the likelihood of a spot Bitcoin ETF approval by the end of 2023. She expressed optimism, stating that the involvement of BlackRock, the largest asset manager in the world, is a bullish signal. Ennis believes that if Bitcoin were to capture even a small percentage of gold’s market cap in institutional portfolios, such as 2 to 5%, the price could easily surpass $100,000.
While Ennis’s insights provide some optimism for Bitcoin investors, it’s important to note that this article does not contain investment advice or recommendations. Investing in cryptocurrencies carries risks, and readers should conduct their own research before making any investment decisions.