Ripple CEO Brad Garlinghouse predicts that the cryptocurrency market capitalization will approach US$5 trillion by the end of the year.
According to him, the market value is about to double. He told CNBC in an interview published on Sunday that this potential development will be driven by several macroeconomic variables. These include the debut of US spot Bitcoin exchange-traded funds and the upcoming Bitcoin halving.
He stated that ETFs, in particular, are drawing considerable participation from institutional investors for the first time.
On Monday, the overall market capitalization of the cryptocurrency market was US$2.7 trillion, with Bitcoin selling at roughly US$70,000. The crypto market is set to hit US$5T, A hypothetical doubling of the market capitalization would yield a new total value of US$5.2 trillion.
Bitcoin's value has increased significantly due to two causes. First, a considerable amount of cash has been channeled toward newly created spot Bitcoin ETFs. Second, market players expect an impending interest rate cut from the Federal Reserve. This has long been regarded as a favorable trend for risk assets such as Bitcoin.
Furthermore, Bitcoin's pre-programmed halving events, which occur every four years, help to slow the rate at which new supply enters circulation. This drop in supply, along with the continual halving of mining rewards, tends to put upward pressure on Bitcoin's price.
Regulatory Clarity and New Administration Ripple CEO Garlinghouse identifies good regulatory developments in the US as a key component in the cryptocurrency market's potential for new highs. Crypto supporters are hoping that the incoming presidential government will be more favorable to the sector.
He identified increasing regulatory certainty as one of the primary macroeconomic tailwinds driving the business ahead.
"The US is still the largest economy in the world, and it's unfortunately been one of the more hostile crypto markets," he added. "And I think that's going to start to change, also."
The SEC filed a lawsuit against Ripple in late 2020, accusing the company of violating securities laws by issuing unregistered securities.
Ripple won a partial success in that dispute when US District Court Judge Analisa Torres delivered a decision contradicting the SEC's assertion.
Ripple has revealed its aim to launch a stablecoin linked to the US dollar this year. Industry forecasts predict that the global stablecoin market will exceed US$2.8 trillion by 2028.
Join our WhatsApp Channel to get the latest news, exclusives and videos on WhatsApp
_____________
Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.