Ripple CEO Brad Garlinghouse has predicted that the crypto market capitalization will double to $5 trillion by the end of the year.
The Ripple CEO cited several factors behind the development, such as the approval of the first US spot Bitcoin ETF and the upcoming Bitcoin halving event.
Crypto Market To Double
According to Garlinghouse, spot Bitcoin ETFs, in particular, are attracting significant investment from institutional players. The United States Securities and Exchange Commission gave spot Bitcoin ETFs the green light on the 10th of January, allowing retail and institutional investors to gain exposure to Bitcoin without directly owning the underlying asset. Monday saw the combined market capitalization of the crypto markets at $2.7 trillion, with Bitcoin trading at around the $70,000 mark.
“I’ve been around this industry for a long time, and I’ve seen these trends come and go. I’m very optimistic. I think the macro trends, the big picture things like the ETFs, they’re driving for the first time real institutional money. You’re seeing that drives demand, and at the same time, demand is increasing, and supply is decreasing. That doesn’t take an economics major to tell you what happens when supply contracts and demand expands.”
The Bitcoin Factor
Bitcoin has been experiencing a surge in value, driven by two main factors. The first is a significant influx of capital towards the newly launched spot Bitcoin ETFs. The second major factor is that market participants expect an imminent reduction in interest rates from the Federal Reserve. This has historically been viewed as a positive development when it comes to assets such as Bitcoin.
Additionally, Bitcoin’s halving event is set for the 24th of April, 2024. The halving event periodically reduces the rate at which the supply of Bitcoin enters circulation. The reduction in supply, coupled with the reduction in mining rewards, leads to an increase in the price of Bitcoin.
“The overall market cap of the crypto industry ... is easily predicted to double by the end of this year ... [as it’s] impacted by all of these macro factors.”
The last Bitcoin halving event occurred in 2020.
Regulatory Clarity Critical For Crypto Boom
The Ripple CEO stated that positive regulatory momentum could play a key role in pushing the crypto markets and crypto adoption to new heights. With the current year being an election year, many in the industry are hopeful the next administration will be more accommodating and have a positive outlook towards the crypto industry regarding policy. Under Gary Gensler, the Securities and Exchange Commission has been particularly aggressive in enforcement when it comes to crypto companies. Garlinghouse stated that increased regulatory clarity will play a key role in propelling the crypto industry.
The US is still the largest economy in the world, and it’s unfortunately been one of the more hostile crypto markets. And I think that’s going to start to change, also.”
The Securities and Exchange Commission sued Ripple in 2020, alleging it had violated securities laws by offering unregistered securities. However, Ripple won a partial victory against the SEC after US District Court Judge Analisa Torres issued a ruling contradicting the SEC’s assertions.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
