Brad Garlinghouse, CEO of Ripple, speaks at the Milken Institute Global Conference 2022 in Beverly Hills, California, USA, May 4, 2022.
Mike Blake | Reuters
The CEO of blockchain startup Ripple sees the combined cryptocurrency market cap surpassing $5 trillion this year.
Ripple’s Brad Garlinghouse told CNBC that he expects the entire crypto market to double in value, citing macro factors such as the arrival of the first U.S. bitcoin exchange-traded funds (ETFs), as well as the upcoming so-called “halving” of bitcoin. “
“I’ve been around this industry for a long time and I’ve seen these trends come and go,” Garlinghouse told CNBC. “I’m very optimistic. I think macro trends, the big picture like ETFs, are driving real institutional money for the first time.”
“You see it’s driving demand, and at the same time demand is going up, supply is going down,” Garlinghouse said. “That doesn’t take an economist to tell you what happens when supply shrinks and demand rises.”
The first US spot bitcoin ETFs were approved on January 10 by the US Securities and Exchange Commission. They trade on US exchanges and allow institutional and retail investors to gain exposure to bitcoin without directly owning the underlying asset.
A bitcoin halving is a technical event that takes place approximately every four years in bitcoin’s history. It halves the total mining reward to bitcoin miners, who are volunteers on the bitcoin network who use high-powered computers to verify transactions and mint new tokens.
The last such event took place in 2020 and the next one is expected to take place later this month.
“The total market capitalization of the crypto industry… is easily predicted to double by the end of this year… [as it’s] it’s affected by all these macroeconomic factors,” Garlinghouse said.
The total cryptocurrency market capitalization was around $2.6 trillion on April 4. If the market were to double, it would mark a new total crypto market cap of $5.2 trillion.
Bitcoin has risen more than 140% in the last 12 months.
It hit a record high of over $73,000 on March 13, according to CoinGecko data. However, it has since fallen well below the $70,000 level.
The world’s digital currency was the main feature driving gains for the broader market.
Bitcoin represents about 49% of the total crypto market, with a market capitalization of $1.3 trillion as of April 1st.
Positive signs for US crypto regulation
One of the other factors Garlinghouse sees pushing the crypto market to new highs is the potential for positive regulatory momentum in the United States.
This being an election year, crypto candidates are hopeful that the next administration will be friendlier to the crypto industry with its policy focus.
The SEC under chairman Gary Gensler has been aggressive in its enforcement of crypto companies, including Ripple itself.
The SEC targeted Ripple with a securities lawsuit alleging it illegally sold XRP, a cryptocurrency closely linked to Ripple, in unregistered securities deals. Ripple denies the allegations and is fighting the suit.
“One of the things I will actually say about the macro winds for the industry: I think we’re going to have more clarity in the United States,” Garlinghouse said.
“The US is still the largest economy in the world and, unfortunately, it’s one of the most hostile crypto markets. And I think that will start to change as well.”
Garlinghouse isn’t the only crypto bull predicting big gains for the crypto market this year.
Marshall Beard, CEO of US crypto exchange Gemini, recently told CNBC at a crypto conference in London that he expects the price of bitcoin to rise to $150,000 later this year.
“Everything has gone up so fast already this year, there’s just a lot of activity, a lot of adoption, new regulations, ETFs, the halving, the miners having to get out,” Beard told CNBC.
“You’re going to see violent moves up and down to that new all-time high, which I think will be $150,000,” Beard added. “It’s probably going to happen this year. I think it’s moving so fast … and I think that momentum, the supply shock, is moving crazy fast.”
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