Key Takeaways:
Brad Garlinghouse, the chief operating officer of cryptocurrency and blockchain startup Ripple (XRP), remains optimistic about the performance of the cryptocurrency market in 2024, predicting that the sector could double in size by the end of the year.
Since the beginning of 2024, the broader crypto market has risen 60% in value and currently has a market cap close to $3 trillion.
Launch of Spot Bitcoin ETFs and Upcoming Halving Event Instrumental to 2024 Rally
While speaking to CNBC, the Ripple CEO cited macro-economic factors like the launch of spot Bitcoin exchange-traded funds (ETFs), and the upcoming Bitcoin reward halving as events that will trigger a major rally in the market.
“They are driving for the first time real institutional money,” he told CNBC. Garlinghouse said that while demand for Bitcoin is on the rise, its supply is steadily declining.
The first batch of spot Bitcoin ETFs was approved by the US Securities and Exchange Commission (SEC) on January 10th. These BTC-backed securities trading on major stock exchanges allow retail and institutional investors to gain exposure to the leading cryptocurrency without having to directly hold the asset.
The trading volume for spot Bitcoin ETFs has remained robust since they began trading on January 11th, 2024, reaching a total of $113.5 billion as of March 11th.
Meanwhile, the Bitcoin halving is a technical event that takes place roughly every four years when the reward given to miners for completing a block of transactions on the network is halved. Miners are volunteers on the Bitcoin network who use high-powered computers to verify transactions and mine new BTC.
The highly-anticipated event, which is less than two weeks away, will create a major supply shock for Bitcoin thereby driving its prices much higher. The last time such an event took place was in 2020, and a year later BTC hit $69,000, its all-time-high until last month.
Garlinghouse predicts the overall market cap of the crypto industry to “easily” double by the end of the year, which means the market will be valued at $5.2 trillion.
Bitcoin has seen its value rise more than 140% in the last 12 months. The apex cryptocurrency hit a record price of $73,000 on March 13th. However, since then, Bitcoin has fallen below the $70,000 level.
Bitcoin is the main crypto asset driving gains for the broader market and accounts for about 49% of the entire sector. As of April 1st, Bitcoin has a market capitalization of $1.3 trillion.
Garlinghouse Expects Positive Crypto Regulations in the US Post-Elections
Garlinghouse also highlighted that positive crypto regulatory momentum in the US will also prove to be a catalyst for the market to rally.
As the US is gearing up for a rematch between Donald Trump and Joe Biden for the White House, there is optimism among crypto hopefuls that the next administration may adopt a more favorable stance towards the industry from a policy perspective.
However, the SEC under the leadership of Gary Gensler has taken an aggressive stance in enforcing regulations on crypto companies, including Ripple. In December 2020, the financial watchdog targeted Ripple with a lawsuit alleging that the startup was involved in the illegal sale of its native XRP cryptocurrency to investors in an unregistered securities deal.
Ripple dismissed all claims and was given a court win late last year.
Garlinghouse expects more regulatory clarity on the crypto market in the United States due to the macroeconomic tailwinds.
Apart from the Ripple chief, some top crypto executives also predict outsized gains for the crypto market this year. Marshall Beard, the COO of cryptocurrency exchange Gemini, recently told CNBC at a crypto conference held in London that he expects Bitcoin’s price to rally to $150,000 by the end of the year.
At press time, Bitcoin (BTC) is trading at $70,186 – up 1.1% in the last 24 hours. Meanwhile, Ripple (XRP) is changing hands at $0.6 – up 0.6% during the same period.
