5 reasons that helped the growth of the crypto market

It is no secret to many that in the recent period we have witnessed a great focus on what is happening in the crypto market, as currencies such as: Bitcoin, Ethereum, and Dogecoin have witnessed great demand from a wide sector of investors and everyone looking for wealth.
Which made Bitcoin reach its highest level, reaching more than $44,000, while it was hovering at less than $16,000 just one year ago.

This heavy demand for trading in these currencies raises a very important question: What are the reasons for this sudden boom? Will it be on this upward trajectory or is it just another short-term bubble about to burst?

1. Cryptocurrencies show no signs of disappearing

Bitcoin and other currencies have proven their resilience, with many attesting that these currencies have shown signs that they will be around forever.
Although Bitcoin in particular declined sharply in value in November 2019, causing some observers to state that this collapse would mark the beginning of the end for Bitcoin and other currencies.

But contrary to the expectations of pessimists, Bitcoin continued to witness significant growth during 2020 and 2021, and did not show any signs of weakness as a currency in the market.
This caused the outlook towards it to change dramatically, and many people began to have a renewed perspective on the currency, as they began to see that it had become more legitimate and able to withstand difficulties.

2. Full support from major companies

The general trust offered by many different major companies and institutions for Bitcoin and other cryptocurrencies has shown a significant rise in their emergence and the beginning of the belief that they are the new way to buy and sell.
For example: Coinbase, which is considered one of the most famous companies that allows users to buy and sell cryptocurrencies, submitted its initial public offering and traded publicly for the first time.

After its appearance on the Nasdaq Stock Exchange, the company’s value reached about $86 billion, recording tremendous growth in revenues.
This step represented a major breakthrough for the future of these currencies, which led to investor optimism regarding the futures contracts of both the company itself and the cryptocurrencies traded on its platform.
In addition, many other major companies have taken serious steps that demonstrate the true power of cryptocurrencies.

Some companies, such as: Visa and PayPal, have allowed the use of cryptocurrencies as a means of payment when purchasing products and services online.
Nvidia also announced a new processor designed for mining cryptocurrencies, the emergence of automated teller machines (ATMs) for cryptocurrencies, in addition to public support from celebrities for these currencies, which prompts their fans to buy more of them.

3. The emergence of competing cryptocurrencies

Although the focus may often be on Bitcoin when talking about cryptocurrency, given that it is the most visible and prominent among all other currencies.
However, we also need to acknowledge the supporting role of other cryptocurrencies, like: Ethereum, Litecoin, and Dogecoin, as many users have taken keen notice of these digital currencies and they have become more competitive.

For example: When more people buy a currency like Bitcoin and make a lot of profits when trading, there is a ripple effect for other cryptocurrencies as people will try their luck at getting rich by trading in other cryptocurrencies competing with Bitcoin.

4. Inflation and economic hardship

According to many studies, some people invest heavily in the crypto market because they have long-term economic concerns, especially with most countries suffering from many economic hardships due to wars, and other reasons.

This led to the emergence of high inflation rates and a decline in the purchasing power of the US dollar, and then most of these people turn to investing in these digital currencies in the hope that their value will increase compared to known currencies, especially the US dollar, which will lead to achieving quick and large profits.

5. The spread of the Corona pandemic and its impact on our use of technology

The emergence and continued spread of the Coronavirus (Covid-19) pandemic has had a huge impact on how we view and use technology on a daily basis. For several months, people were physically stuck at home, working remotely, and paying for everything digitally.

Hence, this forced situation made most people realize how decentralized we have become and how completely dependent on digital technology we have become, and in a world where people work remotely, pay digitally and have complete trust in online services, cryptocurrencies will undoubtedly be king.

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