Here’s Why NEM Has Further Upside Potential
NEM prices were a sight for sore eyes on Thursday. The wider crypto market was crashing while this penny cryptocurrency was shooting through the roof. Two prominent developments seemingly galvanized this price action. We have reasons to believe that the XEM coin performance may eventually deliver on our NEM price forecast for 2018.
Most media outlets on Thursday ran headlines about Coincheck making good on its promise to compensate investors in the aftermath of the notorious Coincheck hack. But there is more to this price surge than just that.
What may truly be reviving investor hopes in NEM is perhaps the Japanese government’s punitive action taken on Wednesday. The Japanese financial watchdog, the Financial Services Agency (FSA), punished two of Japan’s cryptocurrency exchanges, FHSO and Bit Station, on Wednesday.
The two exchanges have been ordered to suspend their trading for a month. At the same time, five other exchanges have received a warning to beef up their security, at the latest by the end of this month.
In total, seven exchanges were dealt with heavy-handedly by the regulators, one of which happens to be Coincheck. The action has been undertaken to avoid future hacks.
While the news weighs heavily on the broader crypto market, the owners of the 520 million stolen NEM coins may be welcoming these penalties with open arms.
The timely and befitting action taken by the regulators is serving to restore dwindling investor faith in local exchanges.
Meanwhile, in other news, the investor community regained some confidence in NEM following the discovery of the lost coins. Yes, a good number of the XEM coins stolen from Coincheck have reportedly been traced.
A crypto forensics company, BIG Blockchain Intelligence Group Inc. (CNSX:BIGG), has tracked down some of the coins at a crypto exchange in Vancouver, Canada. Others have been found on Japanese exchange, Zaif.
How was this made possible? Well, investors have the NEM development team to thank for it. The team created a “tagging system” for NEM coins, so when the hackers tried to move the stolen coins, they unwittingly left behind a trail. (Source: “Stolen Coincheck NEM Found In Exchanges In Canada, Japan, Law Enforcement To Be Informed,” CoinTelegraph, March 2, 2018.)
These two developments may have jointly served to put a bottom under XEM prices this week.
It’s worth pointing out here that NEM is addressing these security issues by outrightly building its own exchange. Once functional, it may allow investors to trade XEM coins with more peace of mind.
Meanwhile, solutions like the “NEM Cold Wallet” offer investors the added security that exchanges are missing.
Nonetheless, it remains an irony that the crypto celebrated for its security fell prey to a security breach. But as the president of the NEM Foundation pointed out in his statement on Thursday; like any other crypto, NEM is only as strong as its weakest link.
The Coincheck hack—and nearly all other crypto hacks in the past—has proven that in the absence of strong firewalls, investors will be exposed to the crypto bandits, even if they’re invested in the most secure, most decentralized, and most private cryptocurrency technologies.
Amid all this chaos, let’s not forget that NEM is a close competitor of Ethereum, and given that Ethereum has earned a massive following on the back of its revolutionary technology, predicting NEM to go down the same path won’t be a shot in the dark.
Meanwhile, we’re also keeping a close eye on any news that would confirm the rumors about Binance adding NEM to its platform. That event could spark another rally in NEM prices.
Regardless, our analysis suggests that NEM may pull itself together in the coming days and retrace its steps back toward our original NEM price forecast, that is, past the $1.00 mark.