According to Gemini’s report dated August 1, this growth will occur with the combination of many factors that have a positive impact on the market. Despite market volatility, key factors supporting the growth of the crypto market include appropriate monetary policy, regulatory changes and infrastructure developments, the report said.

In the last three months, the crypto market has entered a period of consolidation, with major cryptocurrencies trading in a range. Bitcoin fluctuated between $53,550 and $72,000, while Ethereum remained between $2,800 and $3,970. This long period of consolidation followed price increases triggered by the launch of traded funds for Bitcoin and Ethereum.

Bitcoin reached a new all-time high in March, surpassing $73,000. But prices have cooled since then; Ethereum is down about 22% from its all-time high of $4,090 in March, and Bitcoin is down about 12%.

Although some analysts suggest that this cycle has reached its peak, the overall outlook remains positive. “External and asset class-specific factors related to crypto suggest a path forward for continued growth for the industry and market valuation,” Gemini noted.

Change in global monetary policy has been identified as one of the key factors of growth. Central banks such as the European Central Bank, the Bank of Canada and most recently the Bank of England have begun to reduce interest rates after a period of tightening of more than two years.

In the past, tight monetary policies have supported risky assets like Bitcoin and Gold; However, Bitcoin price remains in the range. The recent slow price movement can be attributed to the US Federal Reserve’s decision to keep interest rates steady in August.

If the US lowers interest rates in September, significant new liquidity and upward momentum could be observed in the Bitcoin price. “As interest rate risks turn downward, this could lead to a depreciation in the US dollar. If a broad weakening of the dollar occurs, crypto prices could also rise,” Gemini said.

CME’s FedWatch tool shows that traders rate the odds of the central bank cutting interest rates to 5.00%-5.25% in September at 86.5%. Federal Reserve Chairman Jerome Powell’s statements about interest rate cuts support this possibility.

Regulatory developments may also play a critical role in market expansion. Gemini highlighted the upcoming US Presidential elections as an important factor for the future growth of the crypto industry. In particular, the potential impacts of the elections on the cryptocurrency regulatory environment are attracting attention.

Donald Trump’s proposal to create a national Bitcoin stock pile and his pledge to create a supportive regulatory environment for the cryptocurrency community has received support from the cryptocurrency community.

Kamala Harris, on the other hand, has taken a pro-crypto stance, which is a turnaround from the Bidens administration’s ‘hostile’ anti-crypto regulatory approach. Gemini noted that headwinds from U.S. regulators’ enforcement approach to the crypto industry may ease in the coming years.

Infrastructure developments also have the potential to boost market growth. The current focus on scalable solutions is considered a necessary stage for future industry growth.

The rapid growth of stablecoins and the increasing traction of prediction markets are among the drivers of growth in the industry. This optimistic outlook provides an interesting precedent for price movements in the coming months, highlighting high-potential investment opportunities.