Is Stellar XLM the Best Cheap Alternative to XRP Right Now?

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This past week, Ripple‘s XRP cryptocurrency has captured the attention of many investors due to its surge towards its record value. As a result, its total worth surpassed $184 billion.

Stellar (XLM) – an alternative to Ripple (XRP), well-liked among many – has experienced a surge and reached a peak of $0.5146, which is the highest it’s been since Dec. 2. This increase represents a leap of 555% from its all-time low in the year 2024.

Stellar could be viewed as a less expensive option compared to Ripple, as they have shown a strong historical correlation. Based on data from CoinHedge, their correlation coefficient for the last week was 0.99, and it was 0.85 over the past month. Assets with high correlations tend to follow similar market trends.

It’s probable that this relationship exists due to the fact that both cryptocurrencies are part of the same financial sector. Ripple aims to streamline international money transfers by utilizing RippleNet, a global network that links various financial institutions.

Instead of Stellar, another option is the platform known as Stellar, which empowers businesses in creating payment systems. It’s also commonly used for transactions involving USD Coin (USDC). Stellar has a strategic alliance with MoneyGram, enabling users to transfer and receive the stablecoin at MoneyGram’s outlets.

As a researcher delving into the digital currency landscape, I’ve come to notice an interesting connection – I am referring to Stellar (XLM) and its relationship with Ripple (XRP). Notably, Stellar was founded by Jed McCaleb, who is also one of Ripple’s co-founders. This shared history is often reflected in the description of XLM as Ripple’s “cousin.” However, it’s essential to clarify that unlike a hard fork, where a new cryptocurrency emerges from an existing one, XLM is not a direct descendant of XRP. Instead, they represent separate yet interrelated branches in the digital currency family tree.

From the perspective of a researcher, I’d like to clarify that Stellar isn’t a direct fork of Ripple. Instead, it could be likened to a cousin with shared roots but distinct characteristics.

* Born from the same founder’s vision, yet independently developed
* A unique codebase sets us apart
* Pioneered sub-penny transaction fees right from the start
* Truly decentralized in nature and function

For those in the know (IYKYK), this summary should provide a clear understanding of Stellar’s identity.

— Build on Stellar (@BuildOnStellar) December 18, 2024

Furthermore, many factors causing XRP’s price increase are expected to benefit Stellar as well. For instance, an approval for an XRP Exchange-Traded Fund (ETF) might prompt the submission of a similar application for Stellar Lumens (XLM). This is plausible given that the Grayscale Stellar Trust, which charges a 2.5% management fee and has garnered more than $59 million in assets, already exists.

XLM price has more room to retest ATH

There’s a possibility that XLM can still climb higher to match its previous record, as it only needs to increase by approximately 65% to return to the $0.80 level it reached in 2021. On the other hand, Ripple (XRP) is nearly at its all-time high already.

The graph for the past week indicates that the path of Stellar’s price has created a ‘golden cross’, a pattern where the 50-day moving average surpasses the 200-day moving average. This is a widely recognized bullish signal in trading.

Stellar is looking to recheck the peak it reached last year at approximately $0.6350. If it successfully breaks through this level with a conclusive close, it could indicate further price increases, possibly driving XLM closer to its record high. This aspect makes Stellar an attractive and cost-effective option compared to Ripple for potential investors.

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2025-01-17 20:38