On Monday, Brad Garlinghouse, the CEO of Ripple, forecasted that the total market capitalization of cryptocurrencies could escalate to $5 trillion, reinforcing optimistic outlooks for the cryptocurrency market.
Garlinghouse’s confidence stems from key developments in the sector, notably the launch of the first U.S. spot Bitcoin exchange-traded funds (ETFs) and the anticipated Bitcoin halving event.
Having witnessed the ebbs and flows of the cryptocurrency industry over the years, Garlinghouse highlighted the significant impact of macroeconomic factors, such as the introduction of ETFs, in attracting institutional investments into the space for the first time.
“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,” Garlinghouse told CNBC.
The CEO pointed out the fundamental economic principle that a decrease in supply coupled with an increase in demand typically leads to higher prices.
This principle, he believes, is currently at play within the cryptocurrency market, especially as the Bitcoin halving event approaches.
This event, which reduces the reward for mining bitcoin, thereby constraining supply, is set to occur later this month, having last occurred in 2020.
The U.S. Securities and Exchange Commission on Jan. 10 approved the first U.S. spot Bitcoin ETFs, facilitating both institutional and retail investors to engage with Bitcoin indirectly through U.S. stock exchanges.
This development, along with the halving event, is poised to drastically affect the market’s dynamics.
With the total crypto market capitalization standing at approximately $2.6 trillion as of April 4, Garlinghouse’s prediction implies an anticipated doubling to $5.2 trillion.
This comes as Bitcoin continues to perform robustly, having surged more than 140% year-over-year and reaching a record high of over $73,000 on March 13, as per CoinMarketCap.
