Long correlated with the price of XRP, the XLM of the Stellar blockchain has just taken off and entered the top 10 of the most capitalized cryptocurrencies. A substantial bullish movement fueled by the woes of its rival cryptocurrency XRP?
XLM takes off
Due to its technical similarities with XRP of Ripple , the XLM of blockchain Stellar has long been correlated with the asset. In addition, the Stellar network is a fork of Ripple created in 2014 under the leadership of its founders Jed McCaled , who is also the co-founder of Ripple.
For several years now, the prices of the two assets have known a significant correlation. But recent events have upset this peculiarity, allowing Stellar to take off.
At the time of writing, XLM is exploding upwards and posting a spectacular increase of over 150% on a weekly basis . How is such a progression explained?
On December 22, the SEC filed a lawsuit against Ripple for illegally selling the equivalent of $ 1.3 billion in XRP. Since then, the price of XRP has been steadily falling and has been halved until it stabilizes around $ 0.25. Many believe that a migration of funds from XRP to XLM then began .
Additionally, the Stellar network and XLM itself appear to be taking advantage of the recent decision by an American institution to allow all banking institutions in the United States to use public blockchains and the stablecoins they host to make payments.
Indeed, Stellar already hosts several stablecoins on its network, such as the famous USDC or the EURB, a stablecoin issued by a German bank
In addition, the XLM reacted quickly after Stellar’s announcement earlier this week that the Ukrainian government had selected its teams to help it create a central bank digital currency.
Since then, Ukraine has downplayed Stellar in this project, and said the XLM would not play any role in the creation of this digital currency. However, this has not stopped investors from rushing into cryptocurrency.
We must not forget that this is happening when the market is experiencing a substantial euphoric phase. Besides the fundamental aspect of Stellar, the technical plan was particularly favorable to such a rise.