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Is Investing in Stellar Lumens (XLM) a Good Idea?

Introduction to Stellar (XLM)

Stellar is a decentralized cryptocurrency exchange platform that lets users create and trade various cryptocurrencies. The Stellar platform was created in 2014 by Jed McCaleb after he left Ripple and focused on creating a single network of global financial systems to make it more accessible for everyday users.

What Is Stellar (XLM), and How Does It Work?

Stellar Lumens or XLM is the native cryptocurrency of the Stellar network that is mainly used to pay the transaction fees on the Stellar blockchain network. However, Stellar users can use this token to execute a trade with other cryptocurrencies on the Stellar platform.

The Stellar platform is backed by blockchain technology that has a built-in protocol to convert the currencies (both fiat and cryptocurrencies) to Lumens (XLM) and then again to the desired currency of the country. This makes transactions much more manageable, and money can be sent to or received from any part of the world within a few seconds without the interruption of any intermediate financial bodies.

Historical Data of Stellar

Stellar Lumens or XLM started trading at $0.0021 on September 4, 2014, and the price has hiked since then, although with huge fluctuations, which is very common for highly volatile assets like cryptocurrencies. On January 1st, 2018, XLM traded at $0.5560 and closed at $0.1998 in June 2018 and $0.1157 per coin in December 2018. However, in this process, the XLM token had almost shed around 79% of its closing price as of January 1st, 2018, raising eyebrows as to whether XLM will collapse in the long term due to its continued bearish position since 2018.

Then again, in January 2019, XLM traded at $0.1195 and dropped further to $0.1056, and then eventually closed at $0.0452 on December 31. In this process, the price of XLM plunged by 62.18% yet again, following a bearish trend.

Is It Profitable to Invest in Stellar (XLM)?

Given the popularity of Stellar (XLM), there have always been speculations about the credibility of the token and whether it will be a profitable investment in the future. Users should consider the following factors to judge whether XLM would be a profitable investment or not:

  • Past Performances

Since its inception in 2015, the XLM token has experienced significant growth spurts. There has been a stable growth in its value from 2018 to 2020, and from November 2020, its value rose from 9 cents to 73 cents, thus making a huge difference in its viability in the crypto market. However, from May 2021, the price has been hovering around 26 cents, but it’s overall growth suggests that XLM is an excellent investment to make in the future.

  • Potential Value

Like other cryptocurrencies, Stellar Lumens (XLM) also had a finite supply of 105 million at its launch, with just 20 billion in circulation at that time. But Stellar has burned half of its Lumens, and with this burn, the supply has shrunk to 50 billion. Though it has created huge speculations about Lumens’ investment potential, it is essential to understand that this scarcity would add value over time when the Stellar network will mature and will be used widely by users. This potential increase in the value of the XLM token would increase the potential demand of the asset to buy and hold.

Another reason that the analysts foresee for the profitable Stellar investments is due to the upcoming significant upgrades that the network is bringing into. These upgrades, which have already been incorporated into the Stellar network from March 2020, have improved the Stellar-based applications’ flexibility and interaction with the Stellar Core.

If more dApps (decentralized applications) NFTs (non-fungible tokens) are integrated into the Stellar network, it will rapidly increase the price of Stellar.

Stellar Price Prediction 2022 and Beyond

The open-source nature of Stellar would help in the extensive growth of the coin in the years to come. According to XLM price prediction, the coin could be trading at $0.90 by the end of 2022 and $0.54 and $0.63 by 2023 and 2024, respectively. This implies that the coin’s market value would substantially increase both in the short term and long term.

With increased use rates and high trade volumes, XLM could reach its all-time high price in the coming years.

Top 3 Exchanges to Invest in Stellar: List

Stellar Lumens can be directly purchased on the Stellar platform, but users can also purchase it across other exchanges like Binance, CoinBase, and Kraken.

Conclusion

Thus, Stellar Lumens has a great future ahead, and investing in XLM is worth considering. But just like other cryptocurrencies, XLM also has its fair share of risks and rewards. Crypto enthusiasts should weigh the pros and cons and then decide whether they can afford to take the risks of investing in XLM.

David Pender
David is a journalist interested in writing news-stories regarding forex. He has been in forex industry since 2014. he recently, joined our team as a news writer. He studied mass communication and has 7+ years of experience. He is an avid trader. He can be reached by email: david@forexnews.world.

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