Brad Garlinghouse, CEO of Ripple, speaks at the 2022 Milken Institute Global Conference in Beverly Hills, California, US, May 4, 2022.
Mike Blake | Reuters
The CEO of blockchain startup Ripple sees the combined market cap of the cryptocurrency market exceeding $5 trillion this year.
Ripple's Brad Garlinghouse told CNBC that he expects the entire value of the cryptocurrency market to double, citing macro factors including the arrival of the first bitcoin spot trading funds (ETFs) in the United States, as well as the upcoming so-called “halving” of bitcoin. “
“I've been in this industry for a long time, and I've seen these trends come and go,” Garlinghouse told CNBC. “I'm very bullish. I think macro trends, big picture things like ETFs, are for the first time driving real institutional money.”
“You see that driving demand, and at the same time demand is increasing, supply is decreasing,” Garlinghouse said. “It doesn't take an economics major to tell you what happens when supply contracts and demand expands.”
The first Bitcoin ETFs in the US were approved on January 10 by the US Securities and Exchange Commission. They trade on US exchanges and allow institutions and individual investors to gain exposure to Bitcoin without directly owning the underlying assets.
The Bitcoin halving is a technical event that occurs approximately every four years in Bitcoin's history. It cuts the total mining reward in half for Bitcoin miners, which are volunteers on the Bitcoin network who use high-powered computers to verify transactions and mint new tokens.
The last such event occurred in 2020, and the next one is scheduled to happen later this month.
“The total market cap of the cryptocurrency industry could easily double by the end of this year… (because) it's affected by all these macro factors,” Garlinghouse said.
The total cryptocurrency market cap was approximately $2.6 trillion as of April 4. If the market doubles, it would imply a total market cap of new cryptocurrencies of $5.2 trillion.
Bitcoin has risen more than 140% in the past 12 months.
It reached a record high above $73,000 on March 13, according to CoinGecko data. However, it has since fallen below the $70,000 level.
The global digital currency has been the main token driving gains for the broader market.
Bitcoin represents about 49% of the entire cryptocurrency market, with a market capitalization of $1.3 trillion as of April 1.
Positive signs for cryptocurrency regulation in the US
Another factor that Garlinghouse sees pushing the cryptocurrency market to new highs is the potential for positive regulatory momentum in the US.
Since this is an election year, crypto aspirants are optimistic that the incoming administration will be more accommodating of the cryptocurrency industry with its focus on policy.
The SEC, headed by Gary Gensler, has been strict in its enforcement of cryptocurrency companies, including Ripple itself.
The Securities and Exchange Commission has targeted Ripple with a securities lawsuit alleging that it illegally sold XRP, a cryptocurrency to which Ripple is closely linked, in unregistered securities trades. Ripple denies the allegations and is fighting the lawsuit.
“One of the things I will actually say about industry macro winds: I think we'll get more clarity in the U.S.,” Garlinghouse said.
“The US is still the largest economy in the world, and unfortunately it has been one of the most hostile cryptocurrency markets. I think that will start to change as well.”
Garlinghouse isn't the only crypto bull anticipating big gains for the cryptocurrency market this year.
Marshall Baird, chief operating officer of US cryptocurrency exchange Gemini, recently told CNBC at a cryptocurrency conference in London that he expects the price of Bitcoin to rise to $150,000 later this year.
“Everything has really skyrocketed this year, there's a lot of activity, a lot of adoption, new regulations, ETFs, halving, and miners need to get out,” Bird told CNBC.
“It will see violent movements up and down until we reach a new all-time high, which I think will be $150,000,” Baird added. “It might happen this year. I think it's moving very quickly… I think the momentum and the supply shock is moving very quickly.”
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