Fintech company Ripple believes that by the end of 2024, the market capitalization of all digital currencies in the world will grow to $5 trillion, doubling compared to current figures. How realistic is this forecast?
Bold expectations
Brad Garlinghouse, head of Ripple, expressed the opinion that the capitalization of all digital assets in the world in December this year will increase to $5 trillion. At the current figure of $2.6 trillion, this will be almost double the growth. The reasons for such a sharp increase in capitalization, according to the representative of Ripple, are the upcoming halving of bitcoin in April and the launch of spot bitcoin ETFs, which appeared on the market at the beginning of this year.
Halving factor
As a result of Bitcoin halving, the remuneration of miners for mining a block of cryptocurrency will be halved. As the experience of similar previous events shows, before halving, the bitcoin rate is growing significantly.
The value of the main cryptocurrency has updated its historical maximum and rose to more than $73,000. At the same time, bitcoin capitalization reached $1.39 trillion, that is, this cryptocurrency accounts for more than half of the total capitalization of the digital currency market today.
Despite the positive impact on the price from the upcoming halving, traditionally after this event, the market value of bitcoin is adjusted down. So it is possible that in May bitcoin will also no longer be at its highs and runs the risk of falling below $70,000.
Inflow slowed
As for the positive impact on the market from spot bitcoin ETFs, at first the effect of their appearance was really very significant. In March, the inflow of investor funds to such funds set a daily maximum of just over $1 billion. Nevertheless, already in April, enthusiasm in the market subsided somewhat – the daily outflow of money from the bitcoin ETF at the beginning of the month amounted to more than $200 million.
It is possible that investors’ interest in such funds has somewhat subsided and will continue to decline in the near future. Facing these events, it is quite difficult to assume that by the end of this year, the total capitalization of the crypto market will be able to double. Probably, immediately after halving, the cost and capitalization of bitcoin will go down, which may lead to a reduction in the capitalization of the entire digital asset market to at least $1 trillion.
By Dmitry Noskov, StormGain expert, cryptocurrency trading, buying and storage platforms