While Bitcoin and Ethereum fight it out for the title of crypto heavyweight champion, smaller players have made steady gains in the crypto scene. One of these noteworthy altcoins – Stellar Lumens (XLM) – has been catching the eye of many crypto investors given its steady accumulation and predicted breakout – impacting Stellar Lumens price predictions. Created in 2014 following the departure of Jed McCaleb from Ripple’s management, XLM is positioning itself as the low-cost medium for cross-border transactions. 

Background

Unlike its competitors, Stellar specifically targets unbanked individuals which has made its services particularly popular among users in developing countries. Individuals sending remittances abroad have also benefited from the platform’s cooperation with Wirex, Velo, and Stably which conveniently convert assets into different national stable coins. With a transfer fee of only 0.00001 XLM, for international transactions Stellar outperforms most competitors in terms of speed and expense. 

Users are able to create, send, and trade on Stellar’s open-source network for currencies and payments in a way that “is much faster, cheaper, and more energy-efficient than typical blockchain-based systems”. Describing itself as “cryptocurrency-adjacent” Stellar is not interested in replacing the existing financial system. For this reason, Stellar’s decentralized system is designed to trade all types of money without privileging any above another. The only exception to this is the negligible amounts of lumen (XLM) required for initializing accounts and making transactions on its system. 

Catalysts

Because of these advantages, Stellar’s framework has attracted the likes of IBM which uses Stellar as part of its Universal Payment Solution. In this way, the Stellar Lumens platform connects people who have access to mobile phones despite restricted access to bank accounts. Similarly, Deloitte – one of the biggest professional service providers – signed with Stellar for their Deloitte Digital Bank to facilitate cross-border payments and instant peer-to-peer transactions using Stellar’s technology.

Another addition to this list of big business partnerships is Stellar’s earliest supporter – financial services and SAAS company, Stripe. Noticing Stellar protocol’s heightened functionality early on, Stripe invested $3 million in the then startup and has agreed to return any profits from their sale directly to the Stellar network.

If it stays the course, many are predicting Stellar will obtain the coveted position of “banking cryptocurrency”. Although, until recently, Stellar’s main competitor Ripple and its digital asset XRP were in line for the spot. Ripple has since fallen behind due to an SEC investigation which led Ripple CEO Brad Garlinghouse to announce in March that its planned partnership with MoneyGram would be revisited in the future. This has now opened the door for Stellar to swoop in on the proposed partnership. Hints that MoneyGram was receiving preliminary takeover interest from multiple parties emerged in July but no official statement has been made. 

Already, Stellar’s users send and receive payments in their preferred currency for incredibly low fees compared to services like Western Union, but the addition of MoneyGram International Inc. – one of the largest money-transfer services in the U.S. – would establish Stellar firmly in the financial services sphere. But Stellar has been ahead of the curb in other ways as well. Its founder’s vision of creating a crypto network independent of mining processes, has saved Stellar the scrutiny that Bitcoin and others are facing from energy conscious groups. Stellar also took steps in 2019 to make XLM a more attractive option by burning 55 billion tokens and switching from an inflationary to a deflationary token.

While Stellar makes progress developing decentralized solutions for the banking industry, the decentralized network has made advancements in other areas as well by hosting Dapps with alternative uses. Keybase and SatoshiPay are two of its more well known examples but it remains to be seen how Stellar’s DeFi system will continue when pitted against the developer capabilities of Ethereum’s widely adopted DeFi ecosystem. 

Yet, Stellar’s progress is undeniable. By early 2021 – only seven years after its inception – the Ukrainian government chose Stellar as its partner for developing the nation’s digital currency. Some of the largest digital investment firms such as Grayscale have taken notice of XLM and now Grayscale holds 35 million XLM as of March. The investment hedge fund offers the “Grayscale Stellar Lumens Trust” which is solely and passively invested in Stellar Lumens – a sign of the altcoin’s growing significance. 

Future Outlook

Given the finite amount of XLM and the coin’s increasing adoption, this altcoin and network have the potential to make a lasting mark on the financial sector. XLM has increased 427% since last September and reached 70 cents in May. The coin’s value has slumped in general and XLM is ranked 22 out of all cryptocurrencies according to CoinMarketCap.

This could change if institutional interest increases. Until recently, the coin has not seen the interest that larger crypto networks are receiving but if the altcoin becomes more well-known this could change. Stellar has made headway in often overlooked areas such as the Shariyah Review Bureau. This institution is licensed by the Central Bank of Bahrain and is recognized as an international Sharia advisory agency. After inspecting Stellar’s technology, the bureau determined that Stellar can be deployed for use among Islamic financial institutions. However, the altcoin will need to attract a wide range of institutions to achieve its long term vision.

The Stellar development foundation is aware of these challenges and according to its 2021 roadmap, it is seeking to “ensure that Stellar is usable, scalable, secure, and robust enough to support all existing and future use cases” and is focused “on attracting and maintaining new stakeholders and high-quality validators to Stellar”. The foundation’s overarching goal is to establish “Stellar as the blockchain people know and trust” which will require increasing public awareness. For this reason, the Stellar Development Foundation intends to participate in national and international conversations around payment technologies and target key audiences such as developers, businesses, regulators, and policymakers.

Media Sentiment

As @nxtplse put it, it’s not necessary to understand crypto 100% to see the long-term possibilities of altcoins like XLM and XRP.

Technical Analysis

stellar lumens price predictions XLM chart

Valued at $.323, XLM has taken a steep dive in the last two days. However accumulation shows steady consolidation. The RSI went as low as 17 and 26 in the last few days, but now is at 36 – signaling the chance for a rebound after earlier overselling. The MACD remains very far on the downside but is gradually moving up following a bullish crossover. A support appears at .319 with a secondary support at .311. Its resistance level is near .34.

Stellar Lumens Price Predictions

Crypto is infamous for its volatility, and XLM is no different. The coin’s trends will largely be determined by overall crypto fluctuations until it is able to separate itself from the pack. Bullish investors who believe in XLM’s long term strategy have the opportunity to buy in at this dip price, but an investment with XLM will require patience in the long term before seeing results. Considering its competitive network and low transaction fees, Stellar Lumens price predictions are around $.50-.60 for EOY. But in 2022 XLM could potentially surpass $1.

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