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Crypto prices are taking a breather this week, with Bitcoin maintaining its position above $30,000 despite a minor price drop. Much like BTC, Ether fell to now trade at around $1,860.
In the past 24 hours, however, there have been more red than green moves in the market. Among the top 100 cryptocurrencies, only a handful of crypto assets are rising in value. The likes of Bitcoin Cash (7.1%) and VeChain (4.3%) are the ones in green during this period.
When it comes to losers, Optimism token OP dropped 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 the total cryptocurrency market cap down by 0.11% at $1.214 trillion, while the trading volume is just under $40 billion, according to CoinGecko.
However, one coin is leading the gains among the top 100 cryptos, and it is XLM. The $2.7 billion market cap cryptocurrency is gearing up to enter the top 25 with its 6% gains against USD and 7.1% against BTC in the past 24 hours.
At the time of writing, XLM has been trading at $0.100754 while managing $191.3 million in trading volume, which increased a whopping 313.2% from a day ago and signaling a rise in market activity.
The price of XLM first started pumping two weeks ago when it was trading at $0.0755 and climbed to as high as $0.1055 on Wednesday, representing an increase of almost 40%. However, XLM has started to give off some of these gains as it slides towards $0.10.
The 26th largest cryptocurrency by market cap, XLM is the native token of Stellar. In 2014, Stellar raised $35 million in an initial coin offering (ICO). And when Stellar first started, 100 billion XLMs were created with an annual inflation rate of 1%, which has since been removed.
The nonprofit SDF manages XLM's token supply, and in 2019, more than half of Stellar's supply was burned or removed. Today, almost 27 billion XLM tokens are circulating in the market.
The token is up 23.7% in the past week and 15.8% in the past 30 days. Although up 41.40% in 2023 so far, the token is down 12.8% in the past year and has lost over 88% of its value since hitting an all-time high (ATH) of $0.875 during the 2017 crypto bull run.
In the following bear market, XLM's price sank to a low of $0.03, but the lowest the token ever went was in March 2015 to $0.000476. During the bull market of 2021, while Bitcoin surged to hit a new peak of $69,000, XLM didn't manage to put in a new ATH like most of the crypto assets, but it did manage to hit $0.73 in May 2021.
Stellar (XLM): A Payments Network
XLM powers the blockchain-based payment network Stellar which offers a faster and cheaper way to make global payments than the likes of remittance giants 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 due to a disagreement about 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 collaboration with payment software company Stripe's CEO Patrick Collison. At the time, Stripe invested $3 million in the platform.
Stellar is an open-source payments network that allows anyone to issue new assets, including crypto, stocks, currencies, and more, in the network and exchange for other assets via built-in asset 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 enable non-crypto assets to be exchanged on the Stellar blockchain, which issues tokens tied to these real-world assets to the depositor and returns upon their redemption through its built-in exchange.
For consensus, Stellar deploys the “Stellar Consensus Protocol” (SCP), under which a set group of “trustworthy” nodes are responsible for validating transactions and blocks, making sure no one is creating free money.
These trustworthy 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 votes is responsible for validating transactions.
Because SCP doesn't require costly mining machines, it's a far more eco-friendly blockchain project than other blockchains like Proof-of-Work (PoW) and is how Stellar is able to support faster and cheaper transactions.
As a cross-border payment system that connects financial institutions, Stellar aims to connect individuals, banks, and payment systems with near-instant and secure transfers, hence, uniting the world's financial infrastructure.
XLM's Rally Comes Amidst Network Expansion
Stellar Network's native crypto, XLM, has been enjoying an uptrend amidst the ongoing consolidation in the market, which has gone unnoticed for the most part.
The latest price action could be due to the recent announcement by the crypto exchange Coinbase that it has introduced support for USD Coin (USDC) on the Stellar network, providing low-cost and near-instant transactions worldwide.
“From remittances and real-time payments to global fiat and crypto on/off ramps, USDC on the Stellar network delivers real-world utility for both businesses and individuals alike,” tweeted the team.
USDC is the 2nd largest stablecoin with a market cap of nearly $28.2 billion after Tether's USDT, which boasts almost $83.35 bln in market cap. However, USDC is the most liquid stablecoin on centralized exchanges (CEXs).
Last week, another announcement was made by Stellar regarding its integration with the MoneyGram to facilitate deposits and withdrawals of cash from crypto wallets via USDC on Stellar. Interestingly, back in 2021, Stellar had said that it was interested in buying the money transfer platform.
In addition to these developments, Stellar network has also integrated with crypto payments infrastructure company MoonPay. This will allow users to seamlessly buy and sell cryptocurrencies, including XLM, globally.
Besides all this, in 2023, Stellar got ISO 20022 support from BP Ventures. The ISO 20022 support on Stellar brings the benefits of low fees, 5-second settlement, and immediate finality. Its competitor Ripple has also joined the ISO 20022 standards body and has been working to establish a new data standard for payments between financial institutions.
ISO 20022 is to standardize data transfers between financial institutions across the globe for different kinds of electronic payments. The standard will also be used to settle stocks and other securities. Popular real-time clearing systems, including SWIFT, SEPA in Europe, and Faster Payments in the UK, are already using the standard.
This single standard approach for exchanging electronic messages is already being used in over 70 countries, and the ISO organization expects it to become the universal standard for large-value payment systems of all reserve currencies by 2025. ISO 20022 is further estimated to support 87% of transaction value globally.
This development on Stellar will make it possible to improve operational efficiency while achieving compliance with the new standard at the same time. It will also enable trillions of dollars worth of financial sector transfers to move to the Stellar network.
Latest in the Crypto Market
The rise in XLM's price came amidst Stellar network's growth and expansion and the positive sentiments flourishing in the broad crypto market, with institutions coming in droves.
Bitcoin, however, is currently the center of these traditional financial (TradFi) giants that resulted in pumping BTC's price by about 12% in June and over 82% year-to-date (YTD).
For BTC, $26k is the ‘max pain' point, with more than $350 million in open interest at the $30k strike. With the quarterly expiration on Friday coming closer, the market can see some volatility.
Interestingly, the latest upward price action came after many venture capitalists quit crypto and shifted their attention to the latest trend, i.e., artificial intelligence (AI).
Data from PitchBook shows that crypto funding from VCs is currently at $2.4 billion, representing a drop of more than 80% in Q1 of 2023. On the other hand, AI startups raised $1.6 billion during this period, while another $10 billion in deals have been announced but are yet to close.
Meanwhile, BlackRock, Citadel, Charles Shwab, and Fidelity have taken an even deeper interest in crypto. After BlackRock set off a series of spot bitcoin ETF filings and re-filings, this week, a report came out that the asset management giant Fidelity is also preparing to file for 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 institutional custody platform Fireblocks, retail investors will ultimately drive any significant price surges.
“When institutions come in to participate in the market, and they're doing it in a quiet way, they're able to do it almost without moving the price,” Shaulov told a media publication during Australian Blockchain Week.
Back in 2020, the market saw “massive inflows” of institutional money, but prices didn't really appreciate until retail investors came rushing in later in the year. This is because retail participates in a less sophisticated way that moves the price dramatically, he added.
Still, a spot Bitcoin ETF will “definitely be easier for some institutions that are currently not participating in the market to add Bitcoin to their allocation,” said Shaulov, to whom Bitcoin is the “ultimate insurance asset.”
Besides price and ETF filings, other news came from the now-defunct crypto exchange FTX team, which said the company owed its customers $8.7 billion. About $6.4 billion of these funds were in the form of stablecoin and fiat currency that had been misappropriated.
According to the report filed on Monday, about $7 billion in liquid assets have been recovered so far, and additional recoveries are anticipated. The company is currently in the midst of bankruptcy proceedings in Delaware, and there it has been hinted that its operations could be restarted as FTX 2.0.
Gaurav started trading cryptocurrencies in 2017 and has fallen in love with the crypto space ever since. His interest in everything crypto turned him into a writer specializing in cryptocurrencies and blockchain. Soon he found himself working with crypto companies and media outlets. He is also a big-time Batman fan.