As the world continues to globalize and digitalize, the African continent has been no exception in experiencing the growth and impact of cryptocurrencies. In recent years, Africa has seen a significant rise in the adoption and use of cryptocurrencies, with countries such as South Africa, Nigeria, and Kenya leading the way.

However, just like the rest of the world, the African crypto market faced significant challenges in 2022, with market values crashing and government regulations tightening. Countries like Uganda became hostile towards crypto, with the Central Bank banning financial institutions from facilitating crypto transactions. Nevertheless, as we head into 2023, there are indications that this could be a rebound year for the African crypto market.

To understand why 2023 could be a rebound year for the African crypto market, it is important to first understand the events of 2022. The year began with great promise, with many experts predicting that it would be a breakthrough year for the African crypto market. However, these predictions were quickly dashed as the market faced a series of challenges.

One of the major challenges was the crash in crypto market values, which saw many investors lose a significant amount of their investment. Additionally, government regulations in some African countries, such as Nigeria and Ghana, tightened, making it more difficult for crypto businesses to operate.

The collapse of Sam Bankman-Fried’s empire was also a significant blow to Africa’s crypto community. In Africa, about 100,000 people used FTX as their crypto exchange and its collapse caused massive losses. But it isn't just individuals that felt the FTX crash. Startups like Nestcoin were forced to lay off employees because they kept assets worth millions of dollars of operating expenses on the FTX exchange.

Also, FTX Ventures and Alameda Research were active investors in African Web III startups. One of the standout deals of FTX in Africa was Chipper Cash’s $150m Series C extension round raised in November 2021. FTX was the lead investor in this deal. Alameda Research also invested in startups like the aforementioned Nestcoin of Nigeria. Other startups that received funding were Jambo in Congo, VALR in Soth Africa and Bitnob Exchange.

Despite these challenges, there are several reasons to be optimistic about the African crypto market in 2023. One of the major reasons is the increasing institutional interest in the space.

According to a report by Chainalysis, a blockchain analytics firm, institutional investment in the African crypto market increased by 300% in the first quarter of 2022. This indicates that more and more institutional investors are recognizing the potential of the African crypto market and are willing to invest in it. In 2023, Africa-focused crypto startup, Yellow Card, raised one of the standout deals of 2022. It raised a $40m Series B led by Polychain Capital to expand its operations across the continent. This brought the total funding raised by Yellow Card to $57m, which is the most raised by any Africa-focused startup to date.

Another reason to be optimistic about the African crypto market in 2023 is the growing adoption of decentralised finance (DeFi) and non-fungible tokens (NFTs). DeFi is a new type of financial system that is built on blockchain technology and allows for the creation of decentralized financial services such as lending and borrowing.

NFTs, on the other hand, are unique digital assets that are stored on the blockchain and can be used to represent ownership of digital assets such as art and collectables. According to a report by ConsenSys, a blockchain software company, Africa has the potential to become a global leader in the DeFi and NFT space.

As the continent continues to digitise and globalize, it is likely that the adoption and use of cryptocurrencies will continue to grow, bringing new opportunities and possibilities for the African people. It's important to point out that this is a prediction based on past trends and market conditions and that crypto markets are highly volatile, and any predictions made should be taken with a grain of salt.