The cryptocurrency market could reach a total capitalisation of $5 trillion in 2024, according to Brad Garlinghouse, CEO of blockchain startup Ripple. Garlinghouse cites a convergence of macroeconomic factors, including the launch of U.S. spot bitcoin exchange-traded funds (ETFs) and the upcoming bitcoin “halving” event, in his optimistic forecast. Moreover, he underscores the potential impact of regulatory developments, particularly in the United States. Those factors will play a major role in shaping the trajectory of the cryptocurrency market this year.

Market dynamics driving growth

Garlinghouse expressed confidence in the transformative potential of recent market developments. This includes the approval of the first U.S. spot bitcoin ETFs by the Securities and Exchange Commission (SEC). These ETFs, trading on U.S. stock exchanges, will facilitate greater institutional and retail investor participation in bitcoin, amplifying demand for the cryptocurrency.

Additionally, Garlinghouse highlighted the bitcoin halving event as a driver for the cryptocurrency market’s growth. This process slows the release of the cryptocurrency, whose supply cap is at 21 million by cutting the reward for producing the tokens in half. Of that supply, 19 million have already been mined.

This scarcity-driven mechanism, combined with growing demand fueled by institutional interest and regulatory developments, has contributed to bitcoin’s 140 percent surge in the last 12 months.

As demand for cryptocurrency intensifies, particularly amidst institutional interest, and the supply of new tokens diminishes due to the halving event, the market forecasts a significant expansion in capitalization.

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Policy outlook

Garlinghouse also cites the potential for positive regulatory developments in the United States. This is a critical factor that influences investor sentiment and market dynamics. With 2024 being an election year, the cryptocurrency market is optimistic that the next administration will issue more accommodating policies to the industry.

He also underscored the significance of regulatory certainty, particularly in the largest economy globally. Hence, accommodative policies foster greater investor confidence and market participation. The evolving regulatory environment, institutional adoption, and technological advancements should propel the cryptocurrency market to new heights this year.

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