Capital flowed back into bitcoin on Tuesday amid reports that a major Japanese exchange was planning to make a bid for Coincheck, the Tokyo-based crypto platform that was recently hacked.
BTC/USD Price Levels
The value of bitcoin climbed more than 7% on Tuesday, reaching a session high of $7,529, according to CoinMarketCap. At the time of writing, BTC/USD was valued at around $7,450 for a market cap of $124.6 billion.
Bitcoin’s share of the total crypto market is at 45%, which is about 12 percentage points higher than January’s all-time low. Bitcoin’s growing dominance means more cryptocurrencies follow its lead. This was evident on Tuesday, as the total market cap rose by $20 billion to $282.4 billion.
The world’s largest crypto asset was engulfed in bearish pressure over the weekend after the 50-day moving average crept below the 200-day MA. The so-called “death cross” formation usually signals further downside ahead.
Coincheck Takeover Rumors
Japanese online exchange Monex Group is reportedly in talks to buy a majority stake in Coincheck, according to a report by the Nikkei Asian Review. The acquisition will allow Monex to rehabilitate the exchange in the wake of a major cyber attack that resulted in the loss of more than $500 million.
The deal is reportedly worth one billion yen, which is equivalent to roughly $10 million USD. Nikkei’s sources indicated that a deal could be announced by the end of this week. Meanwhile, Monex shares spiked more than 23%.
Speculation about the potential acquisition boosted investor confidence that cryptocurrency would achieve greater mainstream adoption in Japan. For some, cryptocurrency still faces a crisis of legitimacy, which is limiting its uptake in traditional finance and consumer circles.
While Coincheck has already begun repaying customers for the loss of funds, the exchange has faced multiple lawsuits from disgruntled investors. Japan’s Financial Services Agency (FSA) has also levied two business improvement orders on the exchange for failing to protect its customers.
Japanese regulators have stepped up their oversight efforts in response to the Coincheck hack. Crypto exchanges themselves have also come together to develop a self-regulatory regime, according to multiple sources familiar with the discussions. This includes developing a new body to govern exchanges currently registered with the FSA.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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