What is Stellar: a trader’s guide
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What is Stellar?
Stellar is an open-source, decentralised blockchain network launched in 2014 by Jed McCaleb, co-founder of Ripple, and the Stellar Development Foundation. Its goal is to connect traditional finance with blockchain technology to make cross-border transactions faster, cheaper, and more accessible.
Stellar simplifies global payments by allowing users to issue, exchange, and transfer digital representations of various currencies – such as USD, EUR, or cryptocurrencies – on its network.
Its native cryptocurrency, lumens (XLM), acts as a utility token to facilitate transactions and prevent spam on the network. As of January 2025, Stellar is among the top 15 cryptocurrencies by market capitalisation, according to CoinMarketCap.
How does Stellar work?
Stellar’s blockchain utilises the Stellar Consensus Protocol (SCP), a consensus mechanism that enables network participants to agree on transaction validity. SCP employs a ‘federated Byzantine agreement’ modelx, where each node on the network selects a group of trusted participants (quorum slices), and consensus is reached through overlapping quorums.
This approach allows nodes to coordinate efficiently, with significantly lower energy consumption compared to proof-of-work (PoW) systems like bitcoin (BTC).
Stellar enables users to transact with digital representations of fiat currencies and other assets on its network using ‘anchors’—trusted entities that bridge the Stellar network with traditional financial systems. Stellar’s built-in decentralised exchange (DEX), known as the Stellar DEX, facilitates peer-to-peer trading of various currencies and tokens issued on the network.
XLM is usable as a bridge currency to facilitate transactions between different currencies that may lack direct trading pairs. A small amount of XLM is required for every transaction on the Stellar blockchain, designed to deter spam and maintain the network’s reliability.
What’s the XLM price history?
The XLM price history begins with Stellar’s launch on 31 July 2014, initially introducing its native cryptocurrency as ‘stellars’. This was later rebranded to lumens (XLM) in 2015. During its early years of trading, XLM’s price was relatively low and experienced minimal volatility, as the platform was still gaining traction in the market.
In 2015, Stellar gained attention through its partnership with the Praekelt Foundation, a non-profit organisation focused on leveraging technology for social impact. But while this partnership expanded Stellar’s use cases, it had limited direct impact on XLM’s price.
The first major price surge for XLM occurred in 2017 as cryptocurrency markets gained mainstream attention. Stellar’s partnerships with IBM and other major organisations demonstrated its potential for enterprise use in cross-border payments. These developments coincided with the crypto market’s bull run, propelling XLM’s price to approximately $0.9381 on 4 January 2018 (based on CoinMarketCap data), marking its all-time high.
XLM’s price fell during the 2018 crypto bear market through to early 2019. Despite this downturn, Stellar expanded its ecosystem, securing partnerships with firms like Deloitte and Stripe, which showcased its focus on real-world applications. However, XLM’s price continued to decline, reflecting its susceptibility to broader cryptocurrency market trends.
Past performance is not a reliable indicator of future results.
Stellar regained attention in late 2020 and early 2021 as interest in blockchain-based remittance solutions grew. XLM’s price rose, driven by enthusiasm for its role in cross-border payments and increased adoption of blockchain technologies in financial services. However, the broader cryptocurrency market downturn in 2022 created significant headwinds and influenced XLM’s price lower.
The Soroban smart contracts platform, launched in early 2024, introduced programmability to Stellar’s network, enabling the creation of DeFi applications and NFTs. This innovation attracted developers and expanded use cases, generating renewed interest in XLM. In October 2024, Stellar announced partnerships with Mastercard and Paxos.
Learn more about DeFi and NFTs – read our comprehensive guides on non-fungible tokens (NFTs) and decentralised finance (DeFi) trading.
Which factors might influence the XLM live price?
XLM’s price may be influenced by many potential factors, from technological advancements to adoption patterns and regulatory developments. Here are the main price drivers.
Technological advancements and upgrades
New features and functionality improvements introduced to Stellar’s blockchain might influence XLM’s price.
The beta testing of Soroban smart contracts in 2023 and its full deployment in early 2024 introduced programmability to the network, enabling developers to build decentralised finance (DeFi) applications and NFTs. This helped to attract developers and increase network activity, potentially contributing to increased demand for XLM.
Conversely, if adoption for new upgrades like Soroban falls short of expectations or fails to deliver significant use cases, traders may lose confidence. Alternatively, technical issues or delays in future upgrades might lead to short-term XLM price volatility.
Adoption and strategic partnerships
Partnerships can draw attention to Stellar, potentially influencing XLM adoption and demand.
For example, Stellar’s collaborations with key players in the financial industry, such as its 2024 partnership with Mastercard’s ‘Crypto Credential’ ecosystem, helped enhance verified interactions across public blockchain networks. High-profile partnerships like these often bolster Stellar’s credibility and attract new users, potentially influencing XLM’s price to rise.
Meanwhile, failing to secure additional partnerships or a lack of adoption in key financial markets could hinder Stellar’s expansion, reducing demand for XLM.
Regulatory environment
Regulatory news may drive market sentiment, potentially influencing XLM price movements.
Clearer cryptocurrency regulations in major markets could encourage institutional investment in Stellar’s ecosystem – especially given its focus on fiat-to-crypto transactions. This positioning might enable it to benefit from regulatory clarity, contributing to long-term price growth.
However, stricter regulations or ongoing uncertainty might have the opposite effect. Heightened scrutiny of blockchain-based payment systems could reduce institutional interest, while ambiguous regulations in major markets like the US or EU could deter traders and influence short-term XLM price decreases.
Broader cryptocurrency market trends
XLM is an altcoin and it’s often influenced by broader cryptocurrency market trends.
For example, during bull markets such as the 2021 crypto surge, Stellar benefited from increased market enthusiasm, with heightened activity across the sector driving XLM’s price higher.
Conversely, bearish market conditions can weigh on XLM. For example, during the 2022 downturn, declining sentiment and reduced trading volumes across the crypto sector dragged down XLM, despite ongoing ecosystem developments.
Learn more about altcoins and the cryptocurrency market – read our comprehensive guides on cryptocurrency trading and altcoins.
What are the XLM trading hours?
XLM operates on a decentralised blockchain network that is active 24 hours a day, seven days a week. This means you can trade XLM at any time, including weekends and holidays.
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Cryptocurrency exchanges – many exchanges facilitate 24/7 trading, allowing for continuous market participation.
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Online trading platforms – some reliable and trusted brokerages provide XLM trading via CFDs.
If you choose to trade CFDs, you can follow the XLM performance live in US dollars with our comprehensive XLM/USD price chart.
Alternatively, you can check out our XLM/BTC price chart.
Monitoring the cryptocurrency’s activity can help you to keep an eye out for any key fundamental or technical events that may affect short-term movements in its value.
How to trade XLM
XLM is a cryptocurrency, meaning that it can be traded directly on a cryptocurrency exchange or through peer-to-peer transactions. Traders may also choose to trade XLM via a derivative, a financial product that takes (or ‘derives’) its value from the price of the underlying asset.
You could use a contract for difference, or CFD, to trade on the price of XLM pairs. A CFD is a contract, typically between a broker and a trader, where one party agrees to pay the other the difference in the value of a security, between the opening and closing of the trade.
You can use CFDs to trade on whether you think an XLM pair will rise (called ‘going long’) or fall (‘going short’). CFDs give you access to leverage, allowing larger positions with a relatively small outlay. This amplifies your potential profits, but also your potential losses, making CFD trading risky.
You can learn more about trading cryptocurrencies with Capital.com in our comprehensive guide to cryptocurrency trading.
Aside from CFDs, you can also trade cryptocurrencies through instruments like futures, options, and ETFs. Each offers an alternative to the leveraged trading of CFDs, suiting different risk profiles and strategies.
