Bitfinex predicts the total market capitalization of the cryptocurrency market, currently at approximately $1.6 trillion, is poised to double — potentially reaching a staggering $3.2 trillion, according to its year-end Alpha report.

Despite the challenges faced in 2023, including regulatory hurdles and reputation concerns, the company remains optimistic about the resilience and potential growth of Bitcoin and other crypto assets.

Bitfinex’s expansion continues unabated amid this positive sentiment. The exchange recently launched a dedicated platform for Vietnamese customers in line with its commitment to global growth and accessibility.

A high percentage of Vietnam’s population uses cryptocurrencies, and the move reflects the company’s confidence in the crypto market’s potential and its strategy to deepen its presence in key markets.

2x market cap

According to Bitfinex, the market cap doubling prediction is bolstered by a range of metrics and sentiment indicators, which suggest a similar performance to previous market cycles. The company anticipates the crypto fear and greed index to swing towards “extreme greed,” correlating with new highs for Bitcoin during a mid-year bull market.

Institutional investors are expected to be pivotal in the coming growth trajectory. The anticipated launch of a spot Bitcoin ETF is seen as a catalyst for increased institutional investment, primarily favoring Bitcoin, at least in the first half of 2024. However, a shift towards higher-risk crypto assets might occur as the year progresses.

Meanwhile, the MVRV (Market Value to Realized Value) metric indicates current valuations similar to those in mid-2019 and mid-2016, suggesting potential price dips before sustained recoveries. Bitfinex expects Bitcoin’s price to fluctuate within the $44,000 to $45,000 range before a significant upward movement.

Bitcoin miners are already beefing up their operations in anticipation of the halving event, which will reduce the mining rewards by half.

The exchange said:

“Our analysis indicates that the market is currently in a healthy state, with continued growth in $BTC prices and limited anticipated selling by miners.”

Despite potential initial selling to fund upgrades, miner inflows to exchanges are expected to remain subdued, indicating limited selling pressure as Bitcoin prices rise, according to the exchange.

Adoption and inflation

Global Bitcoin adoption continues to show promise, especially in markets like El Salvador, where it has been declared legal tender, and in Argentina, where citizens increasingly view crypto as a hedge against inflation and currency devaluation.

According to the exchange:

“Bitcoin adoption in certain key markets are also looking promising and we anticipate that the number of global crypto owners could escalate to up to 950 million.”

Bitfinex foresees intensified efforts to bolster Bitcoin infrastructure and public awareness in these regions, especially as the world tackles a deceleration in wage growth and a moderate increase in the unemployment rate to around 4.3 percent in 2024.

Inflation rates are projected to decline due to improved supply chains and a subdued global economy. However, geopolitical tensions and oil production cuts could pose risks of increased headline inflation.

If inflation remains high, it will become another catalyst for people to turn to Bitcoin as it cements its status as digital gold.