Disclaimer: The datasets shared in the following article have been compiled from a set of online resources and do not reflect AMBCrypto’s own research on the subject.
Stellar is an open-source, decentralized, on-chain protocol that facilitates funds transfer across the globe. Lumens (XLM) is the native cryptocurrency of the platform acting as the unit that is used as the transaction fee for transfers.
In 2014, Jed McCaleb along with former attorney Joyce Kim, introduced Stellar that received seed funding worth $3 million from Stripe.
Due to its ability to transmit modest sums, Stellar has evolved into a platform for individuals rather than organizations. Thanks to its simple and user-friendly layout, a multitude is now flocking to the platform.
Stellar makes it possible for cross-border transactions to happen as soon as in 5 seconds. A decentralized platform, it is not controlled by a single individual or entity.
Last week, Stellar released the second preview of Soroban, a new smart contracts platform designed for scalability and sensibility. The aim is to build a developer-friendly, sensible and built-to-scale platform.
Only recently, Ethereum transitioned from the proof-of-work (PoS) to proof-of-stake (PoS) consensus mechanism following the Merge. The step underlines the need for cryptocurrencies to move towards eco-friendly methods. In this regard, Stellar is very promising as it has a smaller carbon footprint. Its authentication cycle is also fast, keeping energy use to a minimum.
Acting as a decentralized currency exchange, Stellar helps you track all of your assets with an orderbook. You can sell, buy and manage all of your assets here, with XLM acting as an intermediate currency for paying transaction fees. The currency is very useful for the users because it helps you reduce transaction costs.
The Stellar network makes transactions seamless and reduces fees for micro-payments and remittances in order to make financial services affordable and accessible to the world.
Transactions on the Stellar platform are performed swiftly due to the ease of Lumens. The currency not only makes transactions seamless for the sender and the recipient but it also ensures that transactions are secure.
Jed McCaleb, Co-founder and CTO of Stellar, said in an interview to CoinMarketCap that XLM is used in a fundamental way for the network.
“Maybe that affects the price, maybe price is a secondary indicator of how useful the underlying protocol is in some way… But I think that the trend is there: that where price and utility can come into play.”
XLM is listed on a number of crypto-exchanges including Binance, eToro, Huobi Global, CoinTiger, FTX, OKEx. This shows that the currency is an increasingly accepted choice of investors now.
A total of 100 billion XLMs were issued when the Stellar network was launched in 2015. In 2019, the group announced that it was burning over half of the cryptocurrency’s supply. Stellar mentions on its website that currently, there are around 50 billion XLMs in existence; 20 billion XLMs are in circulation and 30 billion XLMs are retained by the Stellar Development Foundation for project development. Nothing more will be created.
In an interview in March 2022, Stellar CEO Denelle Dixon said that despite its ongoing military conflict with Russia, Ukraine is still working with Stellar on its central bank digital currency (CBDC). The progress, however, has not been at the expected speed due to the crisis. She added that Stellar is “talking to the administration about things that we can do to help with … humanitarian aid needs.” She also commended Ukraine’s decision to accept cryptocurrency donations for aid.
Also, it was only recently that XLM got listed on the leading cryptocurrency exchange Robinhood, significantly spiking its price.
Due to its increasing adoption, XLM is among the top-30 cryptocurrencies in the world right now, with a market capitalization of over $3 billion.
Why these projections matter
Where Stellar trumps other financial platforms is its low transaction fees which have drawn a huge number of cryptocurrency users to it. It is one of the few blockchain networks that has been successful in collaborating with large tech corporations such as Deloitte and IBM. Stellar, in partnership with IBM, launched a project that enables fintechs to engage in financial transactions using assets such as stablecoins.
It must be noted that Stellar is one of the large corporations that are operating in the cryptocurrency market. It is one of the most centralized cryptocurrency networks active on the internet. While the Stellar network uses decentralized nodes, it doesn’t have that many validators. Such an infrastructure gives the group a lot of control over the operations and price movement of XLM.
In 2016, Deloitte announced a partnership with Stellar, along with four other blockchain networks, to provide new technological capabilities to its global financial institution clientbase.
In June 2018, the Fortune reported that New York financial regulators approved Stellar Lumens to trade on the itBit exchange, the first time the state’s authorities have given it the green light.
In October 2021, IBM partnered with Stellar to facilitate cross-border payments by banks. The system uses XLM as a bridge currency for transactions and it has been successful in the South Pacific region.
The same year, Moneygram announced a partnership with Stellar. Its integration with Stellar facilitates the conversion of the USDC stablecoin into cash and vice versa. The facility aims to encourage the liquidity of cryptocurrencies and the integration of traditional and crypto currencies.
In October 2021, Flutterwave, a global payments technology company, also announced two new remittance corridors between Europe and Africa on the Stellar network. The step is a major step in Stellar’s expansion in the global market.
It also succeeded in receiving certification from the Islamic scholars of Bahrain in 2018, aiming to integrate the technology into the field of sharia-compliant financial products, reported Reuters.
“We have been looking to work with companies that facilitate remittances, including in the United Arab Emirates, Saudi Arabia and Bahrain. It’s a huge market,” said Lisa Nestor, the then-director of partnerships at Stellar. Since the Middle-East and South Asian regions are key areas of growth for the group where a lot of countries are run on a sharia-compliant system, this is a major success for Stellar.
Developing economies are the main focus of the Stellar network in the areas of remittances and loans. It primarily aims to target those who are still not part of the traditional banking system.
In June 2022, the global platform for modern money movement, Nium, and Stellar announced a partnership to enable payouts to 190 countries. “This integration truly drives home the value that blockchain-powered cross-border payment solutions bring to the current financial system,” said Denelle Dixon, CEO and Executive Director of the Stellar Development Foundation. “At SDF, we are always working to fill up the map and connect the network to more of the globe. Together with Nium, we are thrilled to expand the reach of the Stellar network so significantly.”
In an interview with Pymnts last year, Nestor said that digital assets are a tool for everyone and this asset space will grow. Bitcoin, stablecoins, Dogecoin and other assets can all coexist in a single interoperable network and create an inclusive financial system. “We hear from our partners around the world that the ability to save, access and transact seamlessly across borders, with dollars, is something that draws a lot of interest and demand,” she added. Stellar aims to leverage its system in such a way that makes it both accessible and easy to use for people and businesses all over the world.
Another prominent feature of Stellar is that it gives power to the community to decide what project(s) the blockchain should focus on.
We will now briefly give an overview of the key performance indicators of XLM such as price and market capitalization. We will then summarize what the world’s leading crypto-analysts have to say about the future of this currency, along with its Fear & Greed Index.
XLM’s Price, Market Cap and everything in between
XLM’s price has hiked significantly over the last few years. Back in 2018-2019, it kept falling below its previous ATH of around $0.93 (recorded in early January 2018). It was only in 2021 that its price again began to rise, hitting a price level of over $0.7 around mid-May. However, as the crypto-currency market collapsed in the second quarter of 2022, XLM went into a bearish dive.
At the time of writing, it was trading at $0.120, with a market capitalization of $3.06 billion.
The market capitalization of the cryptocurrency follows its price trends throughout. In early January 2018, it was nearly $9 billion and it skyrocketed to as high as $16.5 billion (May 2021) during the crypto-boom of 2021. In fact, it was performing fairly well in 2022 too until the market crashed during the year’s second quarter.
Stellar has seen many growth spurts over the past few years, such as when Mercado Bitcoin announced its use of the platform. In less than a year, Stellar housed almost 3 million user accounts. Since that time, however, Stellar has built a network of partners that includes Flutterwave and MoneyGram.
XLM’s 2025 Predictions
Readers should first be aware of certain things about market predictions. Different crypto-analysts may choose different sets of parameters to predict the prices of currencies. Therefore, it is self-evident that their analyses and predictions will widely vary. Besides, none can foresee certain political or economic changes such as the ongoing Russia-Ukraine crisis or China’s decision to ban crypto-mining. Investors should therefore conduct their own research before deciding to invest in any cryptocurrency.
Nicole Willing is a financial journalist with over a decade of experience. She writes for the Capital and she recently claimed that the price of XLM has now stabilized after stumbling in May due to the collapse of Terra.
In fact, according to Willing, the altcoin could trade at around $0.325 by the end of 2025. Another AI-based forecaster AI Pickup predicted the average price of XLM in 2025 to be $0.14.
A Changelly blog post added that many experts have observed the prices and fluctuations of XLM over the years, concluding that the crypto could go as high as $0.51 and as low as $0.42 in 2025. Its average price will remain around $0.43 in the said year, it added, with potential ROI of the altcoin projected to be 292%.
On the contrary, Finder’s panel of experts are a little more optimistic about where they see XLM going in the next few years. While the average prediction for 2025 centered around XLM being valued at $12.5, there were outlier predictions which places the crypto’s value at $150 by the aforementioned year.
XLM’s 2030 Predictions
The aforementioned Changelly blog post also predicted that the maximum and minimum prices of XLM in 2030 will be $2.97 and $2.56, respectively.
According to Willing’s predictions, experts are both bullish and bearish in their assessment of the performance of XLM in 2030. Some predict that it could go as high as $1.28 while some predict that it won’t be able to hike over $0.352.
On the contrary, Telegaon writes that 2030 could be a year of change for the cryptocurrency market as many coins’ values might reach their peaks during this period. It is extremely bullish in its forecast that the cryptocurrency might hit a maximum level of $31.02.
Finder’s panel, as expected, was even more optimistic on this front. It projected a maximum value of $200 for XLM by the year 2030, with an average price of $17.66 for the cryptocurrency.
Now, while the aforementioned projections might sound crazy, there may be some logic to it too. Consider this – Many nation-states across the world are actively considering Central Bank Digital Currencies (CBDCs). Stellar securing a partnership with Ukraine to provide a CBDC infrastructure could be the catalyst it sorely needs. In fact, according to Finder,
“If successful, it may mean the project becomes the go-to infrastructure provider for governments globally.”
Furthermore, according to Dr. Iwa Salami,
“As an increasing number of countries around the world explore CBDCs, concrete examples of successful implementation of these projects by blockchain technology firms is likely to increase the value of their native cryptocurrencies. As such, this may result in an increase in the price of XLM.”
Not everyone’s convinced though, with some like Professor John Hawkins claiming that such updates are unlikely to “save the coin.”
Even so, it’s worth pointing out that most do see some positive impact on XLM’s prices.
It was in March this year that Stellar stated in its blog that it will launch Project Jump Cannon, an E&D venture to introduce native smart contracts for its blockchain. The same month, it also introduced the Starbridge project that would create bridges between Stellar and other blockchains, enabling interoperability. If Stellar continues to adopt more of such innovations and succeeds in building a larger community, it would significantly increase its price by 2030.
The Stellar team plans to focus on three strategic building blocks in 2022, viz. (i) increasing network scalability and innovation, (ii) activating more network participation, and (iii) promoting diversity and inclusion.
In June 2022, the system upgraded Protocol 19, building payment channels and key recovery channels. Stellar is also working on the Project Jump Cannon to facilitate a robust execution environment for smart contracts.
Stellar has, time and again, stressed on its role in increasing financial inclusion across the globe. In particular, it focuses on working towards better micro-finance management. It has partnered with financial institutions like FinClusive to make financial transactions over banking networks easier and seamless. Today, it operates in association with a number of financial institutions across the globe, shaping the future of a financial system that is welcoming to cryptocurrency.
Any financial institution can integrate with Stellar and avoid the hassle of building its own payment gateway. This facility makes the process innovative and specialized. Besides, the associated costs for both the platforms and its customers are incredibly low, making Stellar the preferred choice of many global financial institutions. This integration connects these global players in such a way that interoperability and communication among different systems are seamless.
These developments are certain to boost Stellar’s credibility among the users. Besides, XLM is one of the most eco-friendly cryptocurrencies. Its consensus model is faster than both PoS and PoW, making it the preferred choice of many investors.
The Stellar network is considered to be a rival to the Ripple network. While Ripple helps banks make fund transfers, Stellar helps individuals outside the banking system make fund transfers. Its simple, swift and economical process has made it very popular among users across several developed countries.
The unique features of Stellar such as strategic partnerships and convenience make XLM one of the most reliable crypto investments. Its growth as a payments network will be the most important factor influencing the future of XLM.
We must note that XLM will be scarce in the future as Stellar doesn’t plan to mint more currency. As it becomes increasingly rare, its value is bound to increase. Such a possible scenario could make XLM a potentially lucrative investment asset.
As far as the F&G Index is concerned, well…