The crypto surge continues to turn heads, pushing the market capitalization of Bitcoin to over $1.2 trillion as pf Feb. 20. The last month has been relatively tough for Bitcoin (CCC:BTC-USD), but it has rebounded well recently. Though Bitcoin is the apple of most crypto investors’ eyes, it’s imperative to look at other currencies that are becoming popular lately. Stellar Lumens (CCC:XLM-USD), for example has been killing it recently, climbing over 200% in the past three months.
It was priced at just 13 cents at the start of the year and now stands at over 39 cents. The outlook for the currency is bullish as most analysts believe it will rise significantly above its current levels.
Stellar is essentially an open-source network that runs on a blockchain. The blockchain improves the overall efficiency of transactions, reduces costs, and saves time. It was developed in 2014 by Jed McCaleb, who is also the co-founder of Ripple (CCC:XRP-USD). Later he partnered with Stripe CEO Patrick Collison in the development of the Stellar Foundation which supports the adoption of the Stellar Lumens payment network.
One of the more unique aspects of the platform is its incredible speed. It can settle cross-border payments in a matter of seconds; such transactions traditionally take from a few days to a week to approve. Additionally, a fixed number of XLMs exists, which can neither be mined nor awarded by Stellar, making lumens an excellent store of value.
There have been several developments that have boosted Stellar’s outlook. First, it recently launched an update for its network called Horizon 2.0. The update will utilize fewer resources, boost the network’s efficiency, and improve its flexibility.
Moreover, institutional investors are becoming more interested in cryptocurrencies, helping the lumen and other less-talked about cryptocurrencies. The lumen has been one of the more popular cryptocurrencies among institutional investors. For instance, Grayscale Investments recently purchased roughly $35 million of lumens.
Furthermore, Stellar recently announced that it was working with the Ukrainian government to develop a digital currency for the country’s central bank.
Additionally, a blockchain startup called Flare Networks recently stated that it would be incorporating lumens in its smart contract platform. Flare essentially acts as a bridge for cryptocurrencies that are incompatible with Ethereum (CCC:ETH-USD). Flare’s partnership with lumens will enable the currency to be used on the Ethereum network.
The Outlook of Lumens
The lumen has not historically been very volatile. Its most noteworthy fluctuations were during 2017 and 2018 when the entire cryptocurrency sector was weakening. Lumens peaked in early 2018 at around 94 cents.
Similar to other cryptocurrencies, though, it dropped significantly from that point until the beginning of 2020. The novel coronavirus was a major catalyst for the second coming of crypto mania, which continues to strengthen.
Analysts have varying predictions about the outlook of the lumen, but the majority of them are bullish on the currency. Long Forecast suggests that lumens could trade around 45 cents to 50 cents by the conclusion of 2021. Coin switch believes that lumens could be worth 77 cents by the end of 2021 and potentially could hit $5 by 2025.
Moreover, Captianaltcoin predicts that lumens will be trading just below 50 cents for most of 2021. Therefore, based on average estimates, lumens are trading at a discount, and their value is likely to climb at least 20% to 30% by December.
The Bottom Line on Stellar Lumens
There’s more to cryptocurrencies than just Bitcoin, and Stellar ‘s impressive growth is a testament to that point. Stellar Lumens has attracted some major institutional interest in the past few months. Additionally, the recent update to its platform will enable it to get more traction with its new users. Analysts’ estimates suggest that the value of the lumen should increase significantly in the next few months, making it worth buying now.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.