XLM Goes Interstellar – 3 Reasons Why Lumens Broke into the Top Ten List
Stellar Lumens rose by more than 30% on the first day of 2018.
The New Year started out with a bang for Stellar Lumens (XLM) as the alt coin skyrocketed to the ninth spot on the list of the world’s largest cryptocurrencies (by market cap) on the first of January.
This marks an increase of approximately 33%, as the cryptocurrency went from $0.36 to a record-breaking $0.48 as per CoinMarketCap (it is still going strong and trading at around $0.50, at press time). XLM’s market cap has risen to over $8 billion, allowing it to overtake popular alt coins such as Dash, Monero, and NEO.
XLM saw a trading volume of around $679 million during the past 24 hours (which is equal to 48,821 Bitcoin), with most of the trading taking place on Bittrex, Poloniex, and Binance.
Founded by Jed McCaleb (one of the co-founders of Ripple), Stellar brands itself as a global payment network powered by DLT, of which Lumens (or XLM) are the native asset.
Stellar’s development team describes the platform as “a decentralized, hybrid blockchain that is fully open-source”, which serves as “infrastructure that exists to facilitate cross-asset transfers of value, including payments”.
The aim is to create a global financial network that is open and accessible to everyone, and serves as a connecting platform for individuals, institutions, and payment systems.
Lumens, as the native token of the Stellar network, have the potential to facilitate DLT-based multi-currency transactions without the need for direct markets or currency-specific gateways.
Reasons behind the price surge
There appear to be three key reasons behind XLM’s recent rise.
Firstly, XLM is an attractive option for investors who are either looking past Bitcoin for more affordable cryptocurrencies, or are frustrated at having missed the recent Ripple (XRP) ride. The latter is likely to be a particularly significant driving force behind the recent surge. XRP broke past the $2 barrier at the end of 2017, and since Stellar and XLM are somewhat similar to Ripple and XRP (in addition to sharing a co-founder), the general expectation is that XLM may take a similar upward path.
Secondly, Stellar is emerging as a promising and efficient platform for the future of cross-border transactions. It is a customizable network for value exchange, through which monetary transactions can become cheaper, faster, and more reliable than they currently are under various systems. In addition, it can serve as a global connecting point, and while the Ripple network is built for banking institutions, the Stellar network presents itself as a viable option for the common man and for P2P global transactions.
Lastly, the recent announcement of partnerships with major banks and tech companies has boosted the profile of Stellar and consequently XLM. According to a recent announcement by IBM, the tech giant will be contributing to the Stellar network with eight validators from around the world, and co-founder McCaleb has confirmed that approximately 30 banks will be joining the IBM project. In addition, Stellar has also announced a number of other new partnerships, and has shown good potential as a secure, affordable, and customizable platform for initial coin offerings (ICOs) in the future, after the Smartlands ICO launch in November 2017.
However, whether Stellar will rise like Ripple remains to be seen, since at this point, even Ripple’s surge is being viewed with skepticism, owing to its centralized nature.