Recent developments in the Bitcoin mining sector have led Hut 8 Vice President Sue Ennis to believe that well-positioned miners will thrive after the upcoming BTC halving.
The next Bitcoin halving event is less than nine months away, and there’s a prevailing consensus among analysts and investors that this halving could propel Bitcoin’s price to a new all-time high, potentially even surpassing $100,000.
Despite this optimistic outlook, the absence of significant fresh investments in the crypto market, ongoing macroeconomic challenges, and Bitcoin’s recent price fluctuations below $30,000 have cast some doubts on the realization of this theory in the short term.
In a recent interview with Paul Barron, Hut 8 Vice President Sue Ennis shared her perspective on how Bitcoin’s price could rise above $100,000 within the next year. She also discussed the potential impact of the upcoming halving on BTC miners. Currently, Hut 8 holds 9,152 BTC in reserve, of which 8,305 are unencumbered. The company boasts an installed ASIC hash rate capacity of 2.6 exahashes per second, and in July, it mined 44.6 BTC.
Ennis addressed the question of whether miners were selling Bitcoin due to the upcoming halving, which might create a need for more efficient ASICs. She also tackled whether BTC’s price action before and after the halving might not be as bullish as investors anticipate.
According to Ennis:
“There’s a lot of really unprecedented dynamics that are happening now in the mining space. […] What’s interesting is hash rate continues to come online despite Bitcoin price trading in a certain band. […] We’re still seeing hash rate increase.”
Ennis elaborated:
“What’s changed now is that we’re seeing Bitcoin price come down a little, but hash rate continues to go up. […] I think what’s really exciting and different is we’re seeing a tremendous amount of new entrants into the global Bitcoin network.”
Ennis pointed out that the Middle East is generating six gigawatts of nuclear and renewable energy, with regional governments exploring Bitcoin mining as a viable option. As a result, more hash rate is being added to the network in a way that is somewhat independent of price fluctuations. This contrasts significantly with publicly traded U.S.-based miners that operate differently.
To withstand the challenges post-halving, Ennis suggested that miners need to diversify their revenue streams beyond just mining Bitcoin. This could involve exploring artificial intelligence applications, allocating space for GPUs dedicated to AI training, offering industrial-level ASIC repair services, or participating in demand-response initiatives with large energy producers and distributors.
While investors have long awaited the launch of a spot Bitcoin exchange-traded fund (ETF), an approval from the U.S. Securities and Exchange Commission (SEC) remains elusive, despite the recent surge in applications.
Ennis sees the approval of a spot ETF as bullish for the asset class, but she also cautioned that it might create selling pressure on miner equities. Mining stocks have often served as a proxy investment for Bitcoin.
Regarding the likelihood of a spot Bitcoin ETF approval by the end of 2023, Ennis stated:
“Definitely better than 50. The real reason for my opinion on that is that BlackRock threw its hat in the ring, BlackRock being powerful and the largest asset manager in the world. For them to throw their hat in the ring and say this is what we want and the amount of clout they’ve had in markets in past initiatives has been tremendous. So I think for them to make this call, that is a real bullish signal.”
On the potential target for Bitcoin’s price, Ennis shared:
“I definitely do think we could see in this next cycle $100,000 cost per Bitcoin, and that’s based on if BTC were to capture even 2 to 5% of gold’s $13 trillion place in institutional portfolios. If Bitcoin were able to capture even 2 to 3% of gold’s market cap, that would be incredibly accretive to the price and push it north of $100,000.”
During the interview, Barron raised the question of whether rising Bitcoin mining difficulty could trigger a fresh wave of selling pressure for BTC. Referring to data from Hashrate Index, Barron noted that spikes in Bitcoin difficulty were followed by drops in the price of BTC.