Stellar Lumens Trading
With more people turning to the crypto market, we explore one of Bitcoin’s foremost competitors, Stellar Lumens. This review will unpack all you need to know about day trading Stellar Lumens. We explain what it is, how to make price predictions today through to 2025, plus the best exchanges and wallets in 2022.
Stellar Lumens Explained
Stellar is a cryptocurrency developed by the Stellar Development Foundation. The foundation is based in San Francisco and is run by founders and owner, Jed McCaleb and Executive director, Joyce Kim.
The Stellar network is a decentralized blockchain distributed ledger. The network connects financial institutions such as banks and payment systems with customers to facilitate quick, low-cost transfers. It operates much like PayPal, with the added benefit of blockchain technology and its own cryptocurrency, Lumen. Lumen is Stellar’s native cryptocurrency and is traded under the symbol XLM.
There are roughly 22.5 billion Lumens currently in circulation with a maximum (total) supply of 50 billion. According to CoinMarketCap, XLM is worth approximately $7.1 billion.
Why Day Trade Stellar Lumens?
Like many altcoins, Stellar Lumens is closely correlated with Bitcoin. Where it differs from Bitcoin, is how it uses blockchain technology. Stellar’s proposition is aimed at bridging the gap between financial institutions and cryptocurrency, much like Ripple (XRP). It operates a decentralized network that permits the digital representation of almost any currency. These currencies can then be traded across a single network. Historically, cross-currency transactions have been expensive and time-intensive, Stellar works to make these transactions quick and simple.
The technology has huge potential and has already been adopted by CBDC giant, IBM. There are rumors that investment bank, JP Morgan, is also working with the technology. If more institutions do the same, the value of XLM could soar.
Stellar Lumens Live Chart
How To Buy Stellar Lumens
Once you have purchased Lumens from one of the exchanges above, you will need somewhere to store them. You can choose between a few storage options:
- Hardware wallets – This type of wallet stores private keys on a device that is not connected to the internet. Ledger Nano S and Trezor are recommended by the Stellar Lumens network.
- Downloadable wallets – The type of wallet stores private keys on an app hosted on your mobile or desktop. They are offered by Keybase, Solar Wallet and Lobstr.
- Web wallets – Like Coinbase, these wallets enable you to view your account balance, compose and sign transactions.
Stellar Lumens Trading Tips
- Tools – Utilise the tools available to put yourself in the best position possible. Historical price charts and volume graphs are a good place to start. Forecasts can be useful too, 5 and 10 year predictions can be great but avoid over-reliance on these as markets can be volatile and unpredictable.
- Educate yourself – There is a wealth of resources available to help prospective traders get to grips with blockchain technology. Some of the best resources are free, including news websites.
- News – Make sure you’re keeping up with the latest news. Updates about crypto regulations, inflation rates, stocks and shares price fluctuations, plus industry developments are all important.
- Fees – Transaction fees vary between providers, so it’s worth doing some price analysis before you start buying or selling XLM.
Today, most brokers will also offer some free resources on their website in addition to displaying live exchange rates (GBP, US Dollar and Euro). Information regarding airdrops and giveaways can be found on the Stellar Lumens website.
For assistance with wallet logins, definitions and general usage, head to popular trader forums or contact the Stellar Lumens team via their website.
The Stellar Lumen network was created in 2014. For the first four years, it enjoyed steady growth, however this changed on January 3rd, 2018 when it was listed on Binance. Following its listing, its price surged by 400% over the course of seven days. An all-time high for the currency.
The next big development followed in November 2019 when the company made the controversial decision to burn almost half of its coins. The move saw the value of the currency rise but it was short-lived. Coin burns are controversial because they exhibit market manipulation which decentralized systems are supposed to prevent.
In May 2020, the value of the Lumen dropped considerably once again. However today, Lumen remains one of the most popular altcoins and is regularly featured on top 10 or 20 lists of tokens based on market capitlization.
There are 50 billion Lumens in existence and no more will be created. Over time, this in itself could drive up the value. In addition, the demand for the Stellar platform could increase. Already we are seeing prominent institutions integrate the technology into their solutions, if this continues the growth potential is substantial. However whilst long-term price predictions may look promising, it is unlikely that it will ever reach the heights of Bitcoin.
Reasons to start trading Stellar include:
- Early adoption – Prominent financial companies are starting to consider this technology. IBM, for example, is one of the blockchain’s most prominent customers. The technology clearly shows promise and if more companies were to adopt it, its value could climb.
- Fewer restrictions – In theory, anyone can validate the transactions on the Stellar blockchain ledger. Fewer restrictions mean that things can happen more quickly and effectively.
The outlook for this cryptocurrency, however, is dogged by several factors:
- Competition – There is a wide range of cryptocurrencies and blockchain services available. Such a crowded market can make it difficult to distinguish yourself from the competition. Arguably, Stellar Lumens and Ripple currently share this niche in the blockchain. But, with the growth of decentralized finance and the likes of Ethereum, this position could soon be challenged.
- Instability – Stellar Lumens is a decentralized currency. Whilst that has its benefits, it is less stable than a centralized currency such as Ripple. Investors may see Ripple as a safer investment as a result.
- Uncertainty – Cryptocurrencies are still relatively new. No one is quite sure what their potential is. It makes it difficult to gauge their long-term value as an investment option. Who knows whether it will explode or if in 5, 30, or 50 years cryptocurrency will even exist. Only recently Tesla’s CEO, Elon Musk, announced that they would no longer accept Bitcoin due to environmental concerns. It seems that cryptos have some way to go before making it mainstream.
Stellar Lumens Vs Competitors
So, how does Stellar Lumens compare against competitors such as Ripple, Ethereum, Bitcoin and Litecoin?
Ripple is arguably its closest competitor and was also founded by Jed McCaleb. There are many similarities between the two cryptos, to name a few: both have private nodes, neither permits mining and both rely on distributed ledger technology. They also share a similar use case, to facilitate quick, low-cost transactions.
The key difference between them is the intended target. Ripple is aimed at banks and Stellar Lumens at individuals too. So it depends on who you are and what you’re looking for. Interestingly, Stellar Lumens was started as a not-for-profit, whereas Ripple follows a traditional business model.
Final Word On Trading Stellar Lumens
So, should you invest in Stellar Lumens or not? Stellar Lumen has a lot to offer. The network technology has a lot of potential and if it becomes fully integrated into banking transactions in the UK and beyond, the future could be very exciting for the network.
The challenge lies in the competition it faces. The likes of Ripple and Bitcoin dominate the cryptocurrency space. Stellar Lumens will need to establish a keen edge to remain competitive. What does help to distinguish the company, is its not-for-profit ethos which is both refreshing and important. We’d like to see the company do well but if you’re expecting the meteoric success of Bitcoin, you may be disappointed.
Is Stellar Lumens A Good Investment In 2021?
Stellar Lumens has a lot of potential. Interest in the technology is promising and if more companies give it their backing, its quote price could rise significantly. However, the cryptocurrency market is unpredictable and there is tough competition from the likes of Bitcoin and Ripple.
How Do I Buy Stellar Lumens?
You can purchase Stellar Lumens from a range of exchanges, including those listed above. Once you’ve found one that suits you, open an account, log in and make a deposit. Deposit options vary according to the exchange but many offer Visa and MasterCard.
Is Stellar Lumens The Next Bitcoin?
Whilst Stellar Lumens has a lot to offer, it’s unlikely that it will reach the heights of Bitcoin. The finite quantity of Lumens in existence will help to improve the expected value but it will need more than that to match Bitcoin’s success.
What Is The Highest Possible Price Of Stellar Lumens?
The highest XLM market price recorded was in January 2018, at $0.93. However, with the crypto market so volatile, it’s hard to know what the future holds for the popular crypto. Keep an eye on price predictions for 2025, 2030 and beyond to help inform longer-term trading decisions.