Nicole WillingThe Stellar Lumens cryptocurrency, XLM, has climbed by 35% since the start of the month, having gained as much as 50% in response to several developments to advance its usage.
Cryptocurrency prices have rallied this month with growing signs of institutional acceptance, including the launch of the first bitcoin exchange-traded fund (ETF).
Is the lumens crypto price consolidating ahead of further gains, or is now the time to sell it short?
In this article, we look at the latest Stellar Lumens news and the XLM price.
Stellar enables low-cost international transactions
Launched in July 2014, Stellar aims to narrow the gap between cryptocurrencies and traditional finance. The blockchain enables fiat currencies and other assets to run in parallel with each other and cryptocurrencies, making it easier to transfer fiat currency into crypto. It was based on the Ripple Labs protocol – the Stellar blockchain was a hard fork, or split, from the Ripple blockchain, and the code was re-written.
The lumen, or XLM coin, is the network’s native coin. Users must hold a minimum balance of one lumen and pay a minimum transaction fee of 0.00001 lumen. According to the Stellar website:
Low transaction fees aim to allow users to transfer money quickly without incurring extra processing costs.
The Stellar Development Foundation (SDF) has partnered with some of the biggest companies in finance and tech, including Deloitte, IBM and Stripe, as well as a dozen financial institutions and payment processors in Asia and Europe. Financial institutions around the world can settle payments and issue assets on the decentralised and scalable network.
On 6 October, the Stellar testnet was upgraded to prepare for the release of Stellar Protocol 18, which will enable developers to create automated market makers (AMMs) on Stellar. AMMs improve network liquidity, which is part of the 2021 growth plan on Stellar’s development roadmap. Validators will vote on a public launch on 3 November. If approved, the upgrade will go live at that time.
Bloomberg reported in July that Stellar had approached US-based global payment remittance giant Moneygram International about a potential takeover in partnership with private equity company Advent International. But on 6 October, the companies announced a partnership to integrate MoneyGram's network with the Stellar blockchain and facilitate payments using Circle's USD stable coin USDC. Customers will be able to use USDC for cash funding and payout in local currencies. The integration will also enable MoneyGram to settle transactions in near real-time, improving efficiency and reducing risk.
The news followed an announcement on 29 September that digital banking company VersaBank and Canadian blockchain fintech company Stablecorp plan to launch a Canadian stablecoin, VCAD, on the Stellar network.
On 25 October, the Stellar Development Foundation reported that global payments technology company Flutterwave has worked with the digital money transfer business TEMPO to launch two new remittance corridors on the Stellar network between Africa and Europe using Stellar USDC.
Today we announced that @theflutterwave, a global payments technology company, has launched two new remittance corridors between Europe and Africa on the Stellar network with @tempo_eu https://t.co/76tt3TPXWx
— Stellar (@StellarOrg) October 25, 2021
Earlier this month, TEMPO said that it has partnered with payment network Arf to launch a new payments corridor from Europe to the Philippines via Stellar.
We are excited to announce we have partnered with @arf_one to launch a new payments corridor from Europe to the Philippines via @StellarOrg, making cross border payments faster and cheaper for customers. pic.twitter.com/QCceHqW0nI
— TEMPO Money Transfer (@tempo_eu) October 5, 2021
With investor interest in Stellar Lumens growing, digital currency asset management company Grayscale Investments said on 18 October that its Grayscale Stellar Lumens Trust has started trading on the OTCQX Best Market, operated by OTC Markets Group, under the symbol GXLM. GXLM has been available via private placement to accredited investors since December 2018.
Craig Salm, Grayscale’s Head of Legal, commented:
Investors will be able to trade GXLM through their investment accounts in the same way as they buy and sell other unregistered securities.
Stellar makes investments to expand its ecosystem
On 8 October, the Stellar Foundation announced a new investment track within its Enterprise Fund to invest in projects that expand the use of the blockchain.
Since the start of this year, the Enterprise Fund has invested $24.5m in fintech and blockchain companies in the US, Latin America and Africa. The Matching Fund will match up to $500,000 in early-stage companies (pre-Series B financing) that are building applications and services on the Stellar network. The Enterprise Fund will focus on later-stage (Series E) investments in companies pre-IPO.
On 14 October, digital financial services company Tala said that it has raised $145m in Series E financing led by Upstart with participation from the Stellar Development Foundation, bringing its total financing to $350m. The investment will enable the company to accelerate the rollout of its new financial account tools and develop a mass-market cryptocurrency product for emerging markets.
Stellar has also allocated close to four million XLM coins to the ninth round of its Stellar Community Fund, which is distributed to projects building on Stellar based on a community vote. The round is open for applications until 21 November.
XLM price bounces up from September lows
The XLM price has been trending higher since 28 September, when it bottomed out at $0.2553, its lowest level since 27 July. The price climbed above $0.36 following the MoneyGram announcement and extended the gain to reach $0.4198 on 16 October, its highest level since 6 September following a cryptocurrency market rally over the summer.
XLM has since been trading between $0.33 and $0.40, up from $0.2790 at the start of October. However, it remains well below the $0.7965 mark reached on 16 May, which was the highest level since the crypto spiked to an all-time high of $0.9381 on 4 January 2018, when the market previously rallied.
On 27 October, the coin traded at $0.3431.
What do some forecasters predict for Stellar Lumens’ future price direction? Will it be able to surpass the previous highs, or is it likely to retreat?
Stellar Lumens price predictions: will the coin resume its rally?
At the time of writing, on 27 October, technical XLM price analysis from CoinCodex was neutral for the short-term, with 14 indicators giving bullish signals, and 15 bearish signals. The 3, 5, 10, 21 and 200-day simple moving averages (SMAs) were giving sell signals, while the 50 and 100-day SMAs were bullish.
The Average Directional Index, Hull Moving Average and volume-weighted moving average (VWMA) pointed to XLM as a buy, while the relative strength index (RSI) and moving average convergence divergence (MACD) were neutral. In the meantime, CoinCodex predicted that the price could drop to $0.3209 by 1 November.
The XLM price prediction from Wallet Investor estimated that the coin’s average price could rise to $0.4980 by the end of 2021 and $0.7340 by the end of 2022. The forecasting service predicted that XLM could surpass its all-time high at the end of 2023 and climb to $1.4390 by the end of 2025.
The stellar crypto forecast from cryptocurrency data site DigitalCoin projected that the price could average $0.6032 in 2022 and $1.05 in 2025. By 2028, the coin could average $1.53, with the price peaking at $1.69 during that period.
The XLM forecast from PricePrediction put the coin at an average of $0.59 in 2022, up from $0.41 in 2021. For the longer term, it estimated that the price could average $1.70 in 2025 and climb to $9.79 in 2030.
It’s important to keep in mind that cryptocurrency markets remain extremely volatile, making it difficult to accurately predict what a coin’s price will be in a few hours, and even harder to give long-term estimates. As such, analysts can and do get their predictions wrong.
We recommend that you always do your own research, and consider the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decision. As always, you should be aware that the past price performance is no guarantee of future returns. And never invest more than you can afford to lose.
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FAQ
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