Bitcoin could reach $100K by securing just 2 to 5% of gold’s market capitalization, says Hut 8 VP Sue Ennis.

The upcoming Bitcoin halving event is now less than nine months away, and the prevailing view among analysts and investors is that this halving could propel Bitcoin’s price to a new all-time high, potentially exceeding $100,000.

Nevertheless, despite this optimism, the lack of new capital entering the crypto market, the ongoing macroeconomic challenges, and Bitcoin’s (BTC) recent trading below $30,000 do not greatly bolster confidence in this outlook for the near term.

In a recent discussion with Paul Barron, Hut 8’s vice president, Sue Ennis, shared her insights on how Bitcoin’s price could surpass $100,000 over the next year and the implications of the forthcoming halving for BTC miners. Hut 8 currently holds a reserve of 9,152 BTC, with 8,305 BTC being unencumbered. The company’s operational ASIC hash rate capacity stands at 2.6 exahashes per second, and in July, Hut 8 mined 44.6 BTC.

During the interview, Barron asked whether the increasing difficulty for Bitcoin miners could trigger a new wave of sell pressure on BTC. Referring to data from Hashrate Index, Barron noted that increases in Bitcoin difficulty were typically followed by declines in BTC’s price.

Bitcoin price, difficulty, and difficulty adjustment. Source: Hashrate Index

Barron queried whether miners were offloading Bitcoin due to the impending halving necessitating more efficient ASICs, and whether the price movements of BTC before and after the halving would not align with investors’ bullish expectations.

In response, Ennis stated:

“There are many unprecedented dynamics currently unfolding in the mining sector. […] It’s noteworthy that hash rate continues to come online even while Bitcoin price remains within a specific range. […] We are still observing an increase in hash rate.”

Ennis expanded on this by saying:

“What has changed now is that while Bitcoin price has dipped slightly, hash rate keeps rising. […] What’s particularly exciting and unique is the influx of new participants into the global Bitcoin network.”

Ennis highlighted six gigawatts of nuclear and renewable energy being produced in the Middle East, noting that the region’s governments are considering Bitcoin mining, leading to a rise in hash rate that is somewhat unaffected by price. This stands in stark contrast to how publicly traded miners in the United States operate.

To remain viable post-halving, Ennis advised that miners should avoid being “single-threaded,” meaning they need multiple streams of revenue beyond solely mining Bitcoin.

Diversifying revenue could involve investigating various artificial intelligence (AI) applications, allocating some warehouse space for GPUs to assist companies focused on AI training, and possibly providing industrial-grade ASIC repair services — or even engaging in demand-response initiatives with large energy producers and distributors.

Related: September ‘crash’ to $22K? — 5 things to know in Bitcoin this week

Higher prices are anticipated due to the halving and potential BTC ETF

Crypto investors have been waiting for years for the introduction of a spot Bitcoin exchange-traded fund (ETF), and despite a recent surge in applications, approval from the U.S. Securities and Exchange Commission remains out of reach.

Despite the history of postponements and rejections, Ennis remarked that a “spot ETF hitting the market would be extremely bullish for the asset class,” though she also warned that such an approval could lead to sell pressure on mining equities, as mining stocks have often served as a proxy investment for Bitcoin.

When asked about the likelihood of a spot Bitcoin ETF approval by the end of 2023, Ennis responded:

“Definitely better than 50. The main reason for my belief is that BlackRock has entered the fray; being the most influential and largest asset manager globally, their involvement carries significant weight. Their decision to pursue this is a strong bullish indicator.”

Regarding a potential Bitcoin price target, Ennis stated:

“I truly believe we could witness a $100,000 valuation per Bitcoin in this next cycle, particularly if BTC manages to capture even 2 to 5% of gold’s $13 trillion share within institutional portfolios. Should Bitcoin secure even 2 to 3% of gold’s market capitalization, it would significantly enhance the price, pushing it above $100,000.”

This article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should conduct their own research before making any decisions.