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David Schwartz, Ripple CTO and one of the original architects of the XRP Ledger, shares his observations on the market in a new series of tweets.
First, Schwartz believes that prices are mostly rational, as everything expected is already baked into the price. Second, any radical change that is not clearly beneficial may be seen negatively by the market.
Another observation made by the Ripple CTO is that the prices of most digital assets appear to move in lockstep, implying that the market is likely to be controlled by factors that influence all digital assets equally. He cites the XRP/XLM correlation and provides a chart illustrating this.
The comments made by the Ripple CTO spurred the question of the likely explanation behind the intriguing correlation between the cryptocurrencies XRP and XLM.
XRP and XLM, which is the native cryptocurrency of the Stellar network, are two of the most prominent digital assets in the crypto space. Both coins aim to facilitate fast and low-cost cross-border payments, leveraging blockchain technology and innovative consensus mechanisms.
However, despite their different features and purposes, XRP and XLM have exhibited a striking correlation in their price movements, puzzling investors and analysts alike.
According to the Ripple CTO, the exact explanation for the correlation remains unknown, but whatever it is, he believes it has to be something that affects XRP and XLM almost equally.
Schwartz pointed out that while XRP and XLM are both being impacted by the same market forces as most other cryptos, this still does not explain why they track more closely than other pairs.
The Ripple CTO gives a likely explanation: "People put XRP and XLM in the same mental bucket due to their histories, and so factors that affect one are especially expected to affect the other. The same people tend to buy both and sell both."
Schwartz further added, "I don't believe some kind of manipulation or evil force is somehow making them track."
At the time of writing, XRP and XLM were mirroring the general price falls on the market, down 0.77% and 1.54% in the last 24 hours to trade at $0.565 and $0.11, respectively.
FAQs
The strong correlation observed by Schwartz points to a potential link between XRP and XLM, where movements in one may influence the other. This correlation is valuable for traders and investors, who might use the price dynamics of one token to anticipate movements in the other.
What does XLM and XRP mean? ›
Ripple (XRP) and Stellar (XLM) are two valuable cryptocurrencies that support the transfer of currency between parties and borders.
What is XLM linked to? ›
Stellar (XLM) is a decentralized peer-to-peer network that is often considered XRP's main competitor. Where XRP is looking at banks, Stellar (XLM) is a form of payment designed from the ground up with the masses in mind. Quick, inexpensive everyday purchases are where Stellar excels.
Why is XLM so good? ›
Stellar (XLM 2.02%) is an open-source, decentralized payments network. It uses blockchain technology to allow users to transfer funds quickly and at a very low cost. The payments network does not show preference to any national currency; instead, the network has its own native cryptocurrency, Stellar Lumens.
Does XRP have a bright future? ›
Conclusion: The Future Looks Bright for XRP
While there may be some short-term volatility, the long-term outlook for XRP is incredibly bullish, with a potential 350% rally on the horizon. If you're already invested in XRP, the key is patience.
Is XRP a good investment? ›
“Investing in XRP is risky and may not be suitable for most investors due to the high price volatility and the difficulty in predicting future trends in the cryptocurrency market,” Drozdz says.
What is XRP meant for? ›
XRP is a cryptocurrency and native token of XRP Ledger, an open-source blockchain. The cryptocurrency and blockchain are designed to enhance global financial transfers and the exchange of several currencies. Investors also use it to store value and profit from price fluctuations.
Does XRP stand for anything? ›
For the native asset built into the ledger, the creators chose the ticker symbol "XRP" from the term "ripple credits" or "ripples" and the X prefix for non-national currencies in the ISO 4217 standard. The company registered itself as "Ripple Labs".
Is XRP backed by gold? ›
Is XRP Backed by Gold? XRP is an open-source token issued by the XRP Ledger Foundation. It is not backed by any assets but has a market value that depends on market sentiments for value.
Who owns the most XLM? ›
What percentage of XLMedia PLC (GB:XLM) stock is held by retail investors? According to the latest TipRanks data, approximately 95.97% of XLMedia PLC (GB:XLM) stock is held by retail investors. Who owns the most shares of XLMedia PLC (GB:XLM)? Ory Weihs owns the most shares of XLMedia PLC (GB:XLM).
20 XLM Partnerships That Have Stellar Lumens Bulls Hopeful
- Tangem.
- Zagg.
- FinClusive.
- Flutterwave.
- ClickPesa.
- Uhuru Wallet.
- Coinqvest.
- Fireblocks.
If the Lumen token can gain 15% a year, it'll reach $1 in 11 to 12 years. At a less realistic average growth rate of 30%, it'll take 7 to 8 years instead.
Can you make money with XLM? ›
You can earn % on XLM just like you would with a traditional bank account, but with a key difference: instead of the near-zero % rates of banks, we offer you % on XLM.
What will XLM be used for? ›
XRP is the Token used by Ripple to facilitate banking transactions, while XLM is used to facilitate cross-border and cross-asset transactions on the Stellar blockchain.
Is Stellar better than Ripple? ›
Ripple (XRP) focuses on fast, low-cost international transfers for banks. Stellar (XLM) aims to provide affordable transfers for individuals, especially in developing countries. Ripple is more centralized, targeting the banking sector, while Stellar is decentralized and focuses on accessibility.
Why will XRP reach $1000? ›
An Argument for a $1,000 XRP Price
This is because XRP's circulating supply of 55 billion would not be sufficient for the amount of XRP tokens needed to handle these volumes.
What is the best wallet for XRP and XLM? ›
Here are some of the best XRP wallets for you to consider.
- Coinsmart. ...
- Ledger Nano. ...
- Trezor. ...
- Robinhood Crypto. ...
- Coinmama. ...
- Edge Wallet. Edge Wallet is a feature-rich software wallet. ...
- Electrum. Electrum is one of the best XRP wallets available on the market. ...
- Atomic Wallet. Atomic Wallet is a software wallet.
Current XLM to XRP exchange rate
1 XLM equals 0.17 XRP. The current value of 1 Stellar is +3.97% against the exchange rate to XRP in the last 24 hours. Create a free Kraken account to instantly convert XLM to XRP or trade XLM/XRP markets today.
Tomiwabold Olajide