The Stellar Lumens project was developed in 2014 at a time when many in the industry were criticizing Ripple. Critics blamed Ripple developers for the platform’s centralized approach to development. As a result, the idea to fork off of the project with a new platform, sharing the same principles but with an emphasis on decentralization appeared. Developer Jed McCaleb created a fork of Ripple and called it Stellar, and in 2015 rebuilt the platform and changed the blockchain. How is the main ideological rival of XRP performing today? Learn in our XLM price prediction for 2020 – 2025.
What is Stellar and Lumens
The main idea of the Stellar platform is the free conversion and exchange of national and digital money. It aims to offer fast, cheap, and secure cross-border transactions around the world. Today more than 2 bln. people don’t have access to banking services, money transfers, etc. The network is built upon a native cryptocurrency called XLM, or Lumens, which facilitates all cross-currency transactions.
The main features and selling points of Lumens:
- high capacity (up to 1000 transactions per second) and good network scalability;
- almost instant confirmation for operations – the average time is less than 5 seconds;
- minimal fees for transactions – 0.0001 XLM;
- both cryptocurrency and fiat transactions can be performed on the same platform;
To combat commercial interests the team has created the Stellar Development Foundation, from which the owners don’t get any profit. It was founded to support the growth and development of the open-source Stellar Network.
Stellar blockchain value for the industry
The Stellar blockchain is based on open source code with information about money exchange operations. The nodes which execute the protocol form a single decentralized network that shares the information publicly.
Each individual node maintains its own identical copy of the blockchain and its opened accounts. Any network node can declare the need to make changes to the accounts database in order to change the properties of certain accounts.
To make changes, all nodes of the network must come to some agreement, a so-called “consensus,” which makes the changes valid. The consensus algorithm is triggered at intervals of three to five seconds. The modified copy of the blockchain is stored on the server of each node in an identical form. Disabling one or more nodes does not affect the performance of the entire ecosystem.
Is Stellar Lumens (XLM) a Good Investment?
Making the right investment in cryptocurrencies is not like investing in other markets. The two clearest things, for those who have just begun investing and are observing how the market works, are that it is EXTREMELY volatile and that many of the startups are so early in their development cycle, that it is hard to ascertain the long term value and/or probability of success of said projects.
Being unable to determine whether a project will exist in the long run, let alone succeed in its vision, can put investors off of investing. This is assuming that a majority of investors are in it for the long haul – HODLing is the market’s preferred term here – and are not wishing to make money off day-trading, a risky proposition to begin with, and exponentially more or so in the crypto market.
Day trading, in a market that is open 24/7, is either for the extremely knowledgeable or extremely foolish in this space. I will not dive into the day trading possibilities of cryptocurrencies, that goes against the true investment value of cryptocurrencies, at least those that matter most (long term potential and impact).
I am going to look at Stellar Lumens (XLM), a very well known cryptocurrency that should be recognizable by even the greenest of investors. Among other arguments, I will look at why one should consider investing in it and how high a return one could possibly obtain from investing in it.
Stellar Lumens is a top 10 cryptocurrency (by market cap) which actually makes investment analysis tougher than, say, an altcoin outside the top 20. While this may appear counterintuitive, it is in fact quite obvious: the top 10 cryptocurrencies are almost guaranteed to grow and succeed, as compared to these smaller-cap altcoins – so you know that most altcoins are likely to fail.
However, with these larger cap tokens, the trouble here is that one must choose between what are close competitors – does one invest in Bitcoin (BTC), Ripple or Stellar, all of whom roughly operate with the same use case? (I say roughly.) So when budgeting one’s portfolio, one must make some tough decisions, determining how much to invest in each of these tokens.
Lumens (XLM) price history
Despite the fact that XLM was created back in 2014, it only appeared on cryptocurrency exchanges 3 years later. The first platform that listed Lumens was the Poloniex exchange.
In the winter of 2017, the price of the token was about 0.002 dollars, but in spring it underwent significant growth, rising to $0.05 in April-May. XLM managed to achieve this price despite Poloniex going offline for several hours due to a hacking attack.
By the end of the summer, Lumens dropped in price to $0.01-0.02 per coin and remained within that price range for several months. But in the fall news broke that the world-famous IT company IBM was planning to use Stellar technology to create a global transaction system. In addition, Stellar was added to three more top cryptocurrency exchanges (Binance, Bittrex, and Kraken). This immediately brought about an influx of capital into the currency and the price went up. In October-November 1 XLM cost about $ 0.04.
December 2017 was a time in which the whole cryptocurrency market experienced a big boost in price. In accordance with the trend, XLM reached $0.27 in mid-December and then skyrocketed to $0.93 within a few days.
In January 2018, the entire cryptocurrency market nearly collapsed, and many experienced drastic dives in value. But Stellar did its best to resist the market trend and successfully pumped its price several times. However, by year-end Stellar succumbed to the bearish market conditions, notching a December 2018 price of $0.1.
Thus far in 2019, Stellar Lumens has continued a downward trajectory, showing price jumps here and there in plays off of Bitcoin price movement. In what is perhaps a good omen for the currency, today the daily trading volume of XLM is almost the same as it was during its ATH.
XLM price prediction for 2020 & 2025 by WalletInvestor
WalletInvestor is giving a bearish forecast for Stellar Lumens. In December 2020, the coin will be about $0.05. The next year XLM will start at $0.05 and will gradually decrease to $0.002 by the end of 2021. During 2022, the price of Lumens will remain on the same price point and in 2023 it will drop to $0.01. For the next two years, XLM will be traded in a price range of $0.007-0.01.
Stellar price prediction for 2020, 2021, 2022, 2023 by TradingBeasts
According to TradingBeasts, Stellar will cost $0.05 this year and will grow to $0.08 this price until 2021. In the beginning of 2022, XLM will climb at $0.09 and reach $0.10 by the end of 2023.
Stellar Lumens price prediction for 2020 & 2025 by DigitalCoinPrice
DigitalCoinPrice has a very positive outlook on the future price of XLM:
- In 2020 – $0.07
- In 2021 – $0.09
- In 2022 – $0.12
- In 2023 – $0.14
- In 2024 – $0.17
- In 2025 – $0.18
XLM price forecast for 2020, 2021, 2022, 2023 by LongForecast
The LongForecast has a measured outlook and doesn’t expect XLM to significantly rise in price. At the end of 2020, the coin will be about $0.06. The next year the price will start at a slightly lower point – $0.05. In March, it will start descending and will reach $0.028 in December. 2022 will be a bit of an unstable year for XLM and it will be traded between $0.016 and $0.026. In 2023 they expect Stellar Lumens to start growing. It will start at $0.022 and will finish at $0.054 in December 2023. In 2024 the price will continue rising and will achieve $0.078 in June.
What can influence the future price of Lumens
The main purpose of Lumens is to be an intermediate exchange currency within the Stellar platform. So, to understand its potential, we have to consider the potential of the platform itself. The possible price growth of XLM can be determined by several factors:
- Partnerships – The project collaborates with many non-profit funds related to cryptocurrency platforms and blockchain projects. In different countries all over the world, companies use the Stellar platform to provide access to users from developing countries.
- IBM collaboration – IBM has launched a World-Wire on the Stellar network – a global payment system for 47 currencies and 72 countries. It has already locked in 6 banks that will issue stablecoins and use the Stellar blockchain. Such a successful case with a tech giant can attract more potential partnerships and collaborations in the future.
- A limited number of coins – In October 2019, Stellar has updated their protocol and eliminated the inflation mechanism, which didn’t satisfy their expectations. A limited number of coins in circulation will stimulate the demand for the digital currency, which may lead to price growth.
- Bitcoin movements – like many other altcoins, Stellar Lumens is dependent on the Bitcoin price and the general trends of the cryptocurrency market. So, we recommend you follow the price of the original cryptocurrency to stay keyed into the bigger picture.
Store Stellar Lumens on Freewallet
If you are looking for a place to store your XLM, try Freewallet Crypto Wallet:
- Store XLM and 150+ other cryptocurrencies in one place. Available on iOS, Android and the web.
- Buy BTC, ETH, LTC, XRP, BCH, TRX and BNB with your credit card.
- Seamlessly exchange Lumens with other cryptocurrencies right in the wallet.
- Make free transactions with other Freewallet users.
- Monitor the price of a coin in the wallet and see your balance in fiat currencies. You will be kept in the loop regarding all exchange rate movements.
- Protect your cryptocurrency with high-grade security features, including 2FA, multi-sig, and transaction limits. The majority of assets are kept in cold storage. It guarantees that your coins won’t get lost or stolen.
What Sets it Apart from its Competitors
Having said this, is there something that distinguishes Stellar from other tokens and gives it a decent enough profitability potential? Can it mark enough territory in the global payments space that it can be considered a worthwhile investment? Primarily, and this is what the Stellar team emphasizes, it is a much more efficient choice of payment that Bitcoin: both transaction fees and times on the Stellar network are negligible. While Bitcoin’s developers are working on fixing this problem for Bitcoin, as it stands, Stellar is the winner in this regard. A particularly significant feature of the Stellar network is that it allows any asset to be issued and have a corresponding token representation – a feature that greatly expands the possibilities with the network. This includes fiat currencies represented by stablecoins, something Stellar is already working on. These tokens are interoperable, which gives the network a lot of potential in terms of utility. There are some technical aspects to the project which distinguish Stellar from its competitors, which I think is worth describing.
The Building Blocks of Stellar
Stellar’s fundamental applications can be categorized into 3 aspects, which the Stellar Foundation calls Asset Issuance, Decentralized Trading and Open Participation.Asset Issuance, as touched upon before, allows users to create tokens that are redeemable for any asset, including fiat currencies, cryptocurrencies or “a bushel of corn,” as they put it. What this lets network participants do is create their markets within the Stellar network which can utilize its advantages to create strong economies designed for specific purposes. It can also be customized such that KYC requirements can be demanded for these tokens. The team describes this as one of Stellar’s strongest features and rightfully so. Imagine being able to digitize to digitize traditional assets like stocks and bonds. The Stellar Network is ideal for the launch of security offerings and indeed some talk is already being had about this.Decentralized trading and open participation, governance in other words, are both fairly straightforward: Stellar offers decentralized trading solutions and an open, democratic network. From a developer’s and investor’s perspective, Stellar offers a few different things of note: a decentralized exchange (DEX) called StellarX, the Stellar Laboratory for “complex transactions”, an open source trading bot feature called Kelp, besides explorers. Stellar’s Horizon API also lets developers build applications on top of the Stellar Network, so it could also become a Decentralized Finance (DeFI) powerhouse.
Currently, Stellar offers two major products: one through its IBM World Wire, which is designed for financial institutions, and the other being SatoshiPay, which is used a tipping service for content creators.
The Challenges that it Faces
That should make Stellar the obvious choice for payments, correct? Then why isn’t it the case? For one thing, money has a great psychological factor behind it. The US Dollar’s strength doesn’t only stem from the strength of the country’s economy, but also from the symbolic strength of it. Bitcoin possesses this symbolic strength in droves. Bitcoin is a household name, and no other cryptocurrency is. The first-mover advantage of Bitcoin is immeasurable.But it would be unfair to say that Stellar won’t be able to become a go-to payments token simply because of that. Nonetheless, all other factors being equal, Bitcoin can be envisioned as the “dollar.” Perhaps not, if Stellar’s many features help enhance the adoption and growth of XLM.
Past Performances
Stellar has generally performed well in the market, its peak being $0.86 during the boom of late 2017. Prior to that, it was at $0.17 – a five fold jump in price when the floodgates had opened and many new investors joined the network. Assuming that the market reaches those heights again (and it will reach comparable heights, of course), one can assume that it will past that all-time high as more users join the network and more applications are developed.
How Far Can it Go?
While we all might agree that Stellar can find its place in the market, how large of a place can that be? If one were to see the price predictions for the long term, they vary greatly with some even going with the absurd amount of $10 – 20. More moderate estimates vary from $1 – 3. That’s still quite an ROI. We’re essentially asking that over-asked question that is popular on cryptocurrency social media channels: when moon? This is the cryptocurrency market and specific price points are impossible to predict. Perhaps a more general estimate on the market cap and adoption growth will better point to address. Stellar’s additional features that make it more than just another payment token is the real selling point of the token. If it can integrate these services to create a solid ecosystem, it’s absolutely certain that it can reach great prices.
Conclusion
It is hard not to recommend Stellar Lumens for investment. If you’re simply looking for a profit, then Stellar Lumens is almost certain to offer you one. How much of profit is open to debate, but that is the case with all tokens. There are very few tokens out there that for which one can say that a profit is likely, and Stellar is one of them. Stellar certainly is a good investment. The development and business strategy of the project is solid. It has already formed some solid partnerships and is making inroads with its applications. Perhaps you would like to make as much of a profit as possible – in that case Bitcoin is probably the best option. However, if you’d like to diversify your portfolio, then Stellar is a more than suitable inclusion.
