In late 2022 the cryptocurrency market crashed after a heady period of successive highs. The value of Bitcoin dropped 63%, the overall cryptocurrency market lost $1.63 trillion in value, and thousands of small altcoins were pretty much wiped from existence.
To make matters worse, once-celebrated crypto giants including Blockfi, Celsius, FTX and Voyager collapsed after filing for bankruptcy.
The so-called crypto winter left crypto investors and traders begging for a light at the end of the tunnel.
For many, the light finally came in 2023. Though they have come nowhere near the highs of 2021, coins like Bitcoin and Ethereum have begun to bounce back in the first few months of 2023.
Bitcoin, for example, jumped as much as 43% in January and achieved its highest one-month performance level since 2021. Ether surged to represent nearly 20.5% of the total crypto market value.
Last month Bitcoin passed $28,000 -- a nine-month high -- after racing up from a trough of $20,000. It has been holding steady at around $26,000 in recent days. The recent bounce has people asking: is the crypto winter finally ending?
Despite the recent surges in valuation, many remain sceptical.
Some attribute the bounce that opened 2023 to the general trend of markets performing well in January, as it is the start of a new year.
Others argue that the pump is an expected outcome following an increase in prices, as those who took short positions on crypto were compelled to exit their positions.
It's also undeniable that all coins are still a far cry from their record-high valuations. Bitcoin, for example, was trading above $40,000 as recently as April last year, after reaching an all-time high of just over $65,000 in November 2021.
Bearing this in mind would make it seem painfully premature to declare a complete comeback just yet.
Sceptics pointed out that higher US interest rates and a stronger US dollar could put a damper on Bitcoin's growth. Cryptocurrencies generally do not fare well with higher interest rates, as investors may prefer to seek out lower-risk assets that offer more secure returns. If Bitcoin fails to perform well, the same mostly goes for the rest of the crypto market too.
There were even certain weeks when Ethereum was completely in the red.
The truth is cryptocurrencies are likely to remain as volatile as they always were. Though not impossible, it will likely take a very long time for Bitcoin and Ethereum to get back to their record highs. They will probably even go through a number of upswings and downswings before getting to that point.
Instead, what many key industry leaders concentrate on is making it easier to provide a use case for crypto. According to Mastercard chief product officer Craig Vosburg, the company continues to work with partners to make buying, selling and holding cryptocurrencies more broadly available through financial institution partners. The logic here is that once people really begin to use crypto in their daily lives, with no fuss, the more valuable it will become.
The principle of providing use cases is clearly understood by startups such as the blockchain solutions provider Pundi X. Pundi X works with institutions such as local governments, universities and even small businesses to help facilitate crypto transactions. Its XPOS point-of-sale machines, for example, enable local vendors to accept crypto from international visitors.
The future of crypto may be unpredictable. But it can be shaped -- simply by making it easier for more people to use.
Hazel Hernandez is a professional in the business process outsourcing and financial industry in the Philippines