Stellar is an open-source cryptocurrency project which aims to provide a low-cost solution for cross-border transactions. In this regard, the token can be seen as an obvious rival to Ripple.
Supported by the Stellar Development Foundation, Stellar has been around for a few years now, and has established itself as one of the more popular cryptocurrencies. In this article, we will examine all of the investment issues related to Stellar, and discuss the likely trajectory of its value in the years to come.
Cryptocurrencies have certainly experienced an eventful trading lifecycle, with many of the altcoins available having increased massively in value in recent months and years. With this in mind, it's interesting to look at the behaviour of Stellar over the last few years, and examine what factors have contributed to this.
Many factors contribute to the value of Stellar in the market and the coin will, to a greater or lesser extent, follow the general trend for cryptocurrencies and Bitcoin. However, the individual characteristics and market for tokens can also have a massive influence, so it’s important to understand the particular qualities of Stellar.
As mentioned previously, one of the central use cases for Stellar is for cross-border payments and so any news or issues in this market can be particularly important for Stellar. Thus, the recent news that the Stellar Development Foundation has partnered with the private equity firm Advent International, with the intention of purchasing Moneygram must be seen as hugely significant. It should be noted that this remains a largely unsubstantiated rumour at the time of writing, but it has been widely reported in the cryptocurrency press in particular.
This would obviously provide Stellar with credibility in the market that would massively enhance its cross-border payment operation. Stellar is definitely in direct competition with the other major cryptocurrency Ripple, and will be looking to get the edge over its fellow altcoin in the months and years to come.
Regardless of whether or not the Moneygram deal is completed, the potential buyout can be seen as a signal of intent from the Stellar Development Foundation, which clearly intends to increasingly move into the mainstream market. This surely must be bullish for Stellar going forward.
Elsewhere, the market conditions have been challenging for cryptocurrencies in recent months, but, as of July 2021, there are signs that the short-term market is beginning to bottom out, which should be excellent news for Stellar and other similar platforms.
July 2014: Jed McCaleb launches Stellar. McCaleb previously founded the Mt. Gox exchange and was also one of the founders of Ripple.
August 2014: Brazilian Bitcoin exchange Mercado announces that it will be utilising the Stellar network going forward. (Stellar Price – $0.001)
January 2015: Stellar reaches the milestone of 3 million registered users, while its market cap touches $15 million. (Stellar Price – $0.003)
April 2015: The Stellar Development Foundation employs a new consensus algorithm that is intended to improve the way that the blockchain operates. (Stellar Price – $0.003)
July 2016: Deloitte announces that it will adopt Stellar for certain cross-border payments. This is significant as Deloitte is one of the so-called ‘Big Four’ accountancy firms. (Stellar Price – $0.001)
May 2017: The commercial arm of Stellar, named Lightyear, is launched. (Stellar Price – $0.04)
September 2017: Stellar announces its Grant Program. As part of this process, the development team behind the crypto award up to $2 million worth of XLM to partners for project development. (Stellar Price – $0.02)
October 2017: Stellar facilitates its cross-border payment operation in the South Pacific region by teaming up with IBM and KlickEx. (Stellar Price – $0.03)
September 2018: Lightyear acquires the fintech developer Chain, and the two companies merge to form Interstellar. (Stellar Price – $0.20)
January 2021: Stellar receives a massive boost to its value when the Ministry of Digital Transformation of Ukraine partners with the currency, as part of its ongoing work on Ukrainian digital infrastructure. The price of the token increases by 40% as a result. (Stellar Price – $0.29)
The development of Stellar has accelerated in the last couple of years, and this means that it's interesting to compare the token with some of the other investment options on the market. So in this section, we will compare Stellar with the US dollar, Gold, and the market-leading cryptocurrency Bitcoin.
It’s firstly notable that the unit price of Stellar is significantly lower than Gold. Stellar has always been a token with a low entry point, and it certainly makes it easier for people from all financial backgrounds to invest. While Gold has increased in value during the COVID-19 pandemic, cryptos like Stellar have increased in value at a much quicker rate and by a much larger extent.
Both Stellar and the US dollar are useful as a means of exchange but Stellar has also increased in value at a rate that any commodity or currency outside of the crypto space can’t come close to matching. Meanwhile, the dollar hasn’t performed particularly well recently. For example, it has declined in value compared with sterling over the last couple of years.
While Stellar is ranked among the top 20 crypto tokens on the planet at the time of writing, it is a vastly different project from Bitcoin, both in ethos and scope. Bitcoin is the archetypal mined crypto, while all of the Stellar coins were made available immediately. Also, as of July 2021, the market capitalisation of Stellar is less than 1% of that of Bitcoin, while each Stellar token is still worth considerably less than $1, compared with the huge Bitcoin price of over $38,000. Stellar has climbed in a fashion that is similar to Bitcoin, but has made smaller gains overall in recent days and weeks, as crypto tokens have moved back into profitability after experiencing a short bear market.
It should firstly be noted that any predictions associated with the cryptocurrency market are far from certain! This is a relatively unpredictable sector and one that has been more volatile than many asset classes and commodities in recent years.
With that being said, technical analysis indicates that Stellar could enter a bullish cycle in the foreseeable future. This is based on the examination of price charts, which indicate that the formation of a new price increase wave for Stellar is on the horizon.
Another major positive for Stellar is that its founding organisation, the Stellar Development Foundation, recently entered into an agreement with Bankhaus von der Heydt (BVDH), one of the oldest banks in Europe. As a result of this collaboration, together with Bitbond, the bank launched a stablecoin based on the Stellar blockchain. This sort of credibility for the Stellar platform can only be positive for the project going forward.
It should also be noted that cryptocurrencies in general seem to have entered a bull market in July 2021. After a difficult period for cryptocurrency investors, during which the market experienced a pretty sharp correction, the prices of major tokens, such as Bitcoin and Ethereum, have increased rapidly in recent trading sessions. This doesn't necessarily mean that the tide has turned permanently, but it could provide a boost for tokens such as Stellar in the near future.
The price outlook for Stellar in the remainder of 2021 would seem to be positive. Although some tokens have experienced a correction in recent months, most expert observers believe that Stellar will increase in value over the remainder of the calendar year. This could see the coin reach new heights before 2021 is over.
Central to this process will be the continuing influence of the COVID-19 pandemic on the global financial system, as it has undoubtedly had a big impact on the increase in cryptocurrencies over the last 18 months. While an economic recovery is undoubtedly underway, the durability of this process is far from certain. Any sort of economic uncertainty is seen as being positive for cryptocurrencies such as Stellar, particularly if other commodities seen as stores of value, such as Gold, are underperforming. Analysts predict a price of $0.448 for the end of 2021.
Stellar should stabilise as a strong cryptocurrency investment in 2022. The general consensus of opinion about the crypto market is that the investment community will significantly increase its adoption of cryptocurrencies in the next couple of years. This means that the general prognosis for Stellar should be positive, particularly if the effects of the pandemic draw on.
Some of the more optimistic predictions for Stellar suggest that the token will rise above $1 for the first time in its history, and that this could happen during 2022. However, it is very early to confidently predict that this will indeed occur, as many factors can impact the market and Stellar between now and then.
It is notable though that most experts and market observers are predicting that Stellar will steadily increase in value over the next couple of years. One analyst predicts that Stellar will reach a value of $0.519 in 2022.
The further that we go into the future, the more difficult it is to predict the direction of Stellar. However, we can also bring broader trends into the equation and make predictions based on the general direction of the market, as well as the opinions of market observers.
It should firstly be noted that the overwhelming consensus is that Stellar will indeed breach the $1 price mark at some point between now and 2025. Indeed, some of the more bullish commentators suggest that the price could even reach $2 by this point, although this view certainly isn't shared by all market observers.
As a general rule, most people believe that major investment and institutional money will continue to flood into crypto tokens in the coming years. This should be extremely bullish for the sector in general, and the history of cryptocurrency investment tells us that as one major token increases in value, others tend to follow.
This does suggest that there could be a major increase in the value of Stellar as the next few years unfold, but this is also dependent on the market conditions in general. Most people believe that the recovery from the recent pandemic and lockdown is rather fragile, and that it could certainly falter, particularly if further lockdowns are imposed by governments. This could be extremely bullish for Stellar and other cryptocurrencies.
However, the future direction of cryptocurrency is also uncertain, with multiple factors that could influence the market, while the regulatory environment associated with the industry also continues to develop and mature. It would be wise to keep an open mind regarding the future of cryptocurrencies, as this is still a relatively embryonic asset class that is developing and finding its feet in a complex financial market.
For more detailed predictions, read our Stellar Lumens price prediction guide here.
In conclusion, Stellar has been an excellent investment during its 7-year existence and has massively increased in value since it was launched. Over the last couple of years in particular, the price of Stellar has escalated, but this preceded a major correction that occurred during 2021.
However, the value of Stellar could be set to increase in the years to come due to a variety of factors. Perhaps the most important is the general influx of money into cryptocurrencies as they become an increasingly attractive proposition for institutional investors. Another is the development of Stellar as a cross-border payment platform, with the token gaining increasing credibility in this area.
Overall, the outlook for Stellar appears rosy, and most market observers and experts believe that Stellar will continue to increase in value steadily over the next few years. It could even result in another bull market if cryptocurrencies experience positive sentiment.
You can purchase Stellar Lumens through and exchange. Take a look at our full list of the top Stellar exchanges for more information.