Stellar (XLM) Eyes Top-25 After Strong Week
Crypto prices are taking a breather this week, with Bitcoin maintaining its position above $30,000 despite a small price drop. Like BTC, Ether declined to now trade near USD 1,860.
However, in the last 24 hours there have been more red than green movements in the market. Out of the top 100 cryptocurrencies, only a handful of crypto assets are increasing in value. Bitcoin Cash (7.1%) and VeChain (4.3%) are green during this period.
When it comes to losers, Optimism token OP fell 7.8% to lead the crypto losses, followed by Synthetix (7%), Frax Share (6.7%), Algorand (6.5%), Near ( 6.2%), Tocoin (6.2%), Mina (5.9%), Lido DAO (5.9%), The Graph (5.9%), Stacks (5.8%), Aptos ( 5.7%) and Aave (5.6%).
These losses have caused the total cryptocurrency market cap to drop 0.11% to $1.214 trillion, while trading volume is just under $40 billion, according to CoinGecko.
However, one coin leads the gains among the top 100 cryptos, and that is XLM. The $2.7 billion market cap cryptocurrency is gearing up to enter the top 25 with gains of 6% against USD and 7.1% against BTC in the past 24 hours.
At the time of writing, XLM was trading at $0.100754 while managing $191.3 million in trading volume, which was up a whopping 313.2% from a day ago and signaling an increase in market activity.
XLM’s price first started pumping two weeks ago when it traded at $0.0755 and climbed to $0.1055 on Wednesday, up nearly 40%. However, XLM has started to release some of these gains as it slides towards $0.10.
The 26th largest cryptocurrency by market capitalization, XLM is Stellar’s native token. In 2014, Stellar raised $35 million in an initial coin offering (ICO). And when Stellar first started, 100 billion XLMs were made at an annual inflation rate of 1%, which has since been removed.
The non-profit SDF manages XLM’s token supply, and in 2019 more than half of Stellar’s supply was burned or disposed of. Today, there are nearly 27 billion XLM tokens circulating in the market.
The token is up 23.7% in the past week and 15.8% in the past 30 days. While it is up 41.40% so far in 2023, the token is down 12.8% over the past year and has lost more than 88% of its value since hitting an all-time high (ATH) of $0.875 during the crypto bull run of 2017.
In the next bear market, the price of XLM fell to a low of $0.03, but the token’s all-time low was in March 2015 at $0.000476. During the 2021 bull market, as Bitcoin soared to a new high of $69,000, XLM failed to enter a new ATH like most crypto assets, but it did manage to hit $0 in May 2021 .73 to reach.
Stellar (XLM): a payment network
XLM powers the blockchain-based payment network Stellar, which offers a faster and cheaper way to make global payments than lenders like MoneyGram and Western Union, which charge high fees and can take days to process a transaction.
The project was founded by Jed McCaleb, a computer programmer and former CTO at rival payments company Ripple. He left Ripple in 2013 over a disagreement over the company’s proposed direction and then started Stellar by forming a new blockchain that split off from Ripple’s blockchain.
In 2014, McCaleb launched the Stellar Development Fund (SDF) in partnership with the CEO of payment software company Stripe, Patrick Collison. Stripe invested $3 million in the platform at the time.
Stellar is an open-source payment network that allows anyone to spend and exchange new assets, including crypto, stocks, currencies, and more, on the network for other assets through built-in decentralized exchange features.
In the Stellar network, assets are issued and redeemed by anchors, which are verified financial institutions that act like banks and hold deposits. These trusted entities or anchors make it possible to exchange non-crypto assets on the Stellar blockchain, which issues tokens associated with these real-world assets to the depositor and are refunded after their redemption through the built-in exchange .
For consensus, Stellar implements the “Stellar Consensus Protocol” (SCP), under which a fixed group of “trustworthy” nodes are responsible for validating transactions and blocks, to ensure that no one is creating free money.
These trusted nodes are voted on periodically and anyone on the network can participate by running a node. Each node votes for the one they believe is trustworthy, and the one with the majority of the votes is responsible for validating transactions.
Since SCP does not require expensive mining machines, it is a much more environmentally friendly blockchain project than other blockchains such as Proof-of-Work (PoW) and Stellar can support faster and cheaper transactions.
As a cross-border payment system connecting financial institutions, Stellar aims to connect individuals, banks and payment systems with near-instantaneous and secure transfers, unifying the world’s financial infrastructure.
Click here to learn more about the differences between Ripple (XRP) and Stellar (XLM).
XLM’s rally comes amid network expansion
Stellar Network’s native crypto, XLM, is enjoying an upward trend amid the ongoing consolidation in the market, which has gone largely unnoticed.
The latest price action could be due to the recent announcement by crypto exchange Coinbase that it has introduced support for USD Coin (USDC) on the Stellar network, offering low-cost and near-instant transactions worldwide.
“From money transfers and real-time payments to global fiat and crypto ramps, USDC on the Stellar network delivers real-world utility for businesses and individuals alike,” the team tweeted.
USDC is the second largest stablecoin with a market cap of nearly $28.2 billion after Tether’s USDT, which has a market cap of nearly $83.35 billion. However, USDC is the most liquid stablecoin on centralized exchanges (CEXs).
Last week, Stellar made another announcement regarding the integration with MoneyGram to facilitate deposits and withdrawals of cash from crypto wallets via USDC on Stellar. Interestingly, in 2021, Stellar had said it was interested in buying the money transfer platform.
In addition to these developments, the Stellar network has also been integrated with crypto payment infrastructure company MoonPay. This allows users to seamlessly buy and sell cryptocurrencies worldwide, including XLM.
In addition, Stellar received ISO 20022 support from BP Ventures in 2023. The ISO 20022 support on Stellar offers the benefits of low cost, 5 second resolution and instant finality. Its competitor Ripple has also joined the ISO 20022 standards organization and has been working on a new data standard for payments between financial institutions.
ISO 20022 aims to standardize data transfer between financial institutions around the world for different types of electronic payments. The standard will also be used to settle stocks and other securities. Popular real-time settlement systems, including SWIFT, SEPA in Europe and Faster Payments in the UK, already use the standard.
This single standard approach to exchanging electronic messages is already in use in more than 70 countries, and the ISO organization expects it to become the universal standard for high-value payment systems of all reserve currencies by 2025. ISO 20022 further supports an estimated 87% of the transaction value worldwide.
This development on Stellar will make it possible to improve operational efficiency while complying with the new standard. It will also enable trillions of dollars in transfers from the financial sector to the Stellar network.
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Latest in the crypto market
The rise in the price of XLM came amid the growth and expansion of the Stellar network and positive sentiment flourishing in the broader crypto market, with institutions flocking.
However, Bitcoin is currently at the center of these traditional financial (TradFi) giants, resulting in BTC’s price rising about 12% in June and more than 82% year-to-date (YTD).
For BTC, $26,000 is the “max pain” point, with over $350 million in interest outstanding at the $30,000 strike. As the quarterly expiration approaches on Friday, the market may see some volatility.
Interestingly, the latest upward price action came after many venture capitalists abandoned crypto and shifted their focus to the latest trend, which is artificial intelligence (AI).
Data from PitchBook shows that crypto funding from VCs currently stands at $2.4 billion, representing a decline of more than 80% in the first quarter of 2023. On the other hand, AI startups made $1.6 billion during this period billion, while closing another $10 billion in deals. announced but have yet to close.
Meanwhile, BlackRock, Citadel, Charles Shwab, and Fidelity have shown an even greater interest in crypto. After BlackRock kicked off a series of spot bitcoin ETF filings and re-deposits, a report came out this week that asset management giant Fidelity is also preparing to file a spot bitcoin ETF.
While an approved BlackRock spot Bitcoin ETF will bring new institutional money to BTC, according to Michael Shaulov, the CEO and co-founder of the institutional custody platform Fireblocks, retail investors will ultimately drive significant price increases.
“If institutions come in to participate in the market, and they do it quietly, they can do it almost without changing the price,” Shaulov told a media outlet during Australian Blockchain Week.
In 2020, the market saw a “massive inflow” of institutional money, but prices didn’t really rise until retail investors rushed in later in the year. This is because retail is participating in a less sophisticated way, driving up the price dramatically, he added.
Still, a spot Bitcoin ETF will “certainly be easier for some institutions not currently participating in the market to add Bitcoin to their allocation,” said Shaulov, for whom Bitcoin is the “ultimate asset of insurance.”
In addition to price and ETF filings, other news came from the now-defunct crypto exchange FTX team, which said the company owed its clients $8.7 billion. About $6.4 billion of these funds were in the form of stablecoin and fiat currency that had been embezzled.
According to the report filed Monday, about $7 billion in cash has been recovered so far and more recoveries are expected. The company is currently in the middle of bankruptcy proceedings in Delaware, where it has been suggested that it could restart operations as FTX 2.0.
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