Following a rough two-week period, it seems like the predictions regarding bitcoin’s alleged recovery might be coming true. Yesterday saw the currency trading at roughly $7,100. A $300+ jump is now in the books, and at press time, bitcoin is trading for just shy of $7,500.
This is a near five percent spike in less than 24 hours. The move likely stems from the recent report that Japanese cryptocurrency exchange Coincheck is on course to be rescued.
Last January, Coincheck was the victim of one of the largest hacks in history. The platform lost over half-a-billion dollars in NEM coins – a figure surpassing that lost by Mt. Gox, a fellow Japanese exchange. The nation may be one of bitcoin’s largest modern-day hubs, but it’s clearly vulnerable to several of bitcoin’s ongoing security issues.
However, similar with what San Francisco firm Kraken did for Mt. Gox, Tokyo-based Monex Group has announced it is examining the possibilities of “taking over” Coincheck, and that an official deal could be reached as early as this week.
The company released the following statement:
“We have been considering the acquisition of the cryptocurrency firm [Coincheck] mentioned in the report today, but have not made any decision yet. Moving forward, should there be facts determined by Monex Group, Inc. that need to be disclosed, we will do so in a timely and appropriate manner.”
Monex has been experimenting heavily with the blockchain and cryptocurrencies, and has been seeking an open door to the industry for some time. “As part of our efforts, we set up the Monex Cryptocurrency Lab in January this year, and have also been considering the secure and socially responsible cryptocurrency (crypto-assets) business,” executives commented.
A potential takeover of Coincheck could be the answer they’re looking for.
Despite the good news regarding bitcoin’s price, some analysts remain bearish in their sentiment. A group of Zurich-based researchers, for example, state that users shouldn’t get too comfortable with the current price, as things are about to get even uglier. They predict the cryptocurrency market could shed as much as 37 percent later this year, which would bring the total market cap down from about 120 billion to 77 billion.
The researchers base their decisions on what’s known as Metcalfe’s law, a principle first described in the 1980s by ethernet founder Bob Metcalfe. He states that “the value of a network is proportional to the square of the number of nodes.” This idea is also known as the “network effect.”
The researchers say there simply aren’t enough bitcoin users to support growing price hikes. They suggest that the hype which occurred in 2017 was a fluke that’s not likely to be repeated. Even worse, they state users can expect several volatile swings throughout the remainder of the year before the currency even starts to settle.
On the other hand, former VISA executive John Matonis praised bitcoin, and said it was headed towards a prospective price boom thanks to what he feels will be ongoing cooperation and integration from banks and financial institutions. He says that anyone who still sees bitcoin as a bubble isn’t seeing things clearly, and that bitcoin is the “pin that is going to pop the bubble.”