XLM, the native cryptocurrency of the Stellar blockchain focused on payments, has risen to highs of more than two years. An analyst says the bull run is driven by falling prices of rival cryptocurrency XRP and recent indications from the US office of the Comptroller of the Currency (OCC) on stablecoins. XLM hit record highs above $ 0,39, the highest level since November 2018, settling around $ 0,32 at press time.
A sustainable increase according to analysts
The third largest cryptocurrency by market cap doubled in value this week. Trading volumes have increased, parallel to the rise in prices. “The average volumes measured by CF Benchmarks' XLM / USD trading price have more than doubled in the past 14 days,” said Sui Chung, CEO of CF Benchmarks. Price increases supported by increased volumes are considered sustainable by chart analysts.
XLM and XRP
According to Denis Vinokourov, head of research at London-based prime brokerage Bequant, XLM is enjoying a double advantage at the expense of XRP, partly because XLM is a modified fork of XRP. On December 22, the SEC filed a lawsuit against Ripple Labs, the San Francisco-based company of the Ripple payment protocol and exchange network, for raising $ 1,3 billion over a seven-year period from investors al retail through its XRP sale. Since then, the price of XRP has plummeted to nearly $ 0,20 and the crypto community speculates that funds will be shifted from XRP to XLM. Discover the quotation of the major cryptocurrencies in real time!
XLM and the OCC
In addition to the consequences of the legal proceedings pursued by the SEC, XLM also appears to benefit from the recent decision by the US OCC to allow US banks to use public blockchains and dollar-backed stablecoins as a settlement infrastructure in the financial system, Vinokourov said, adding that "In the meantime, XRP is unlikely to benefit as it is engaged in the SEC case."
XLM and Ukraine
XLM is continuing to grow following Stellar's recent announcement that the company is helping Ukraine develop its own central bank digital currency (CBDC). While Ukraine has since downplayed the importance of Stellar's role and reiterated that the XLM token would play no role in the CBDC, apparently that hasn't stopped some investors from buying it.
"It is reported that the Ukrainian government has selected the Stellar blockchain network to build its potential CBDC," said CF Benchmark's Chung. "This is turning into a perfect storm for XLM." Several cryptocurrency exchanges have removed XRP since the SEC announced its lawsuit against Ripple. Additionally, Grayscale Investments removed XRP from its large-cap crypto fund and crypto fund manager Bitwise liquidated its XRP holdings.