Stellar Lumens, symbol XLM, is a cryptocurrency that ended the year as a cryptocurrency in the top 5 market cap. Lately, it switches between the 4th and 5th position. This article describes our up-to-date vision on our 4 USD of Stellar Lumens prediction, hence this Stellar Lumens price forecast for 2019. Long story short, based on our 5 cryptocurrency predictions for 2019 we continue to believe that our 4 USD Stellar Lumens price forecast is intact although it will materialize only in 2019 or 2020.
As part of this Stellar Lumens price forecast 2019 we will look into a couple of aspects: how is our Stellar Lumens price forecast influenced by growth principles, will Stellar Lumens likely get a bid from institutional investors, what do we see in the data and what do we see on its long term price chart. All aspects combined will determine our Stellar Lumens price forecast for 2019, and, likely, 2020.
Note that this, and much more actionable insights, is what InvestingHaven offers on its crypto & blockchain investing research service.
What is Stellar Lumens?
Stellar is an open-source and decentralized blockchain platform with a native currency with symbol XLM. In essence this is a global payment platform facilitated by Stellar Lumens as a digital asset. The huge benefit that this platform brings to the table is that it executes fast, secure, and ultra-cheap payments between a very large number of currency pairs.
The functional flow of Stellar Lumens’s blockchain based payment platform is shown on this picture (courtesy of Achainofblocks). This may look somehow complicated but it is as simple as can be. One should try to compare this with the immensely complex legacy payment systems for which we even don’t dare to pull up a functional flow.
What this picture shows in essence is that the Stellar network uses the token Lumens to ‘transfer’ an amount in any currency into any other currency in a seamless and ultra straightforward way.
Stellar Lumens price forecast based on “Lean Startup” principles
Every cryptocurrency is essentially a crypto startup. The fact they have a token is of secondary importance. Looking at things in this way implies that 90% of startups fail (miserably) because they develop products that the world does not need.
The most important signs to look for is ‘traction’. In startup terms it means that there is product/market fit. This means that the startup develops a product or service in a way that it solves a problem for certain segments of the market. The larger the market the bigger the potential for the startup.
This is, by far, the most important challenge that any startup faces, also every crypto startup that has a cryptocurrency. It is also the reason why we attach some much value to this as part of our Stellar Lumens price forecast for 2019 (similar to any other price forecast in the crypto space).
Taking this viewpoint neutralizes the largely irrelevant concepts of cryptocurrency market cap and the likes.
So which problem does Stellar Lumens solve, and which signs of traction do we see?
The service of Stellar Lumens is especially interesting for the large group of people that desire to do cross-border payments as well as the huge group of unbanked in the world.
That’s because of the attributes of the Stellar network outlined above in the first section, and the function of Lumens as a digital asset in there: cheap, reliable, fast. Because of this it does not discriminate between people that have an official bank account or not because anyone can do a payment transaction as long as you you have that an asset can be accepted on the Stellar network.
Stellar Lumens price forecast bullish because of ‘traction’
We clearly do see signs of traction in Stellar Lumens. This is especially important for our Stellar Lumens price forecast 2019 because of the horrible and painful crash in the crypto market.
What we are saying is that the vast majority of crypto projects failed miserably, and it became clear in recent months. More importantly, many are laying off staff, but a small minority is hiring.
Although we would classify the following as anecdotal evidence, or data with a secondary importance for our Stellar Lumens price forecast 2019, Stellar Lumens as an organisation is hiring. At the time of writing there are 10 open positions for new staff, at the depth of the crypto winter, that’s remarkable!
Along the same lines Stellar Lumens is looking at simulating developments on the Stellar platform with an updated reward program.
Let’s consider the above points as anecdotal evidence for now, and focus on the leading indicators that point to ‘traction’.
For us the most important data point that suggests traction is the number of transactions and the total number of assets allowed on the Stellar network. The chart below makes the point, it is factual and objective.
The reason why the number of assets is so important is because of network effects. Growth is only possible if any user can transact with any other user in the world. Therefore, you need a very high number of currency pairs and related assets to be accepted. This the basic infrastructure requirement for growth, and, visibly, it is there.
Even at the depth of the crypto winter Stellar Lumens appeared to be capable of growing their network and service leading to a strong growth in transactions. This is amazing, and makes them part of the 10% (if not 2%) crypto projects that is surviving and will thrive.
We see a somehow similar picture on this very recent infographic (source Stellar expert). It shows how many operations were processed, how many assets (like currency pairs, other cryptocurrencies, and so on) are available on the Stellar network and the number of Stellar Lumens accounts on the blockhchain.
Pretty impressive, especially looking at growth during the crypto winter!
One of the things that really stood out this year is that Stellar Lumens launched an airdrop which consisted of more than $20 in XLM for every holder of a Blockchain.com wallet. The total amount of the airdrop was $125 million. This classifies as the largest airdrop token in the history of cryptocurrencies, but, arguably, the largest money gift to the public in history of mankind!
Another illustration of the growth which is visible in the data outlined above is the new blockchain based peer2peer marketplace in India called Diruna which was able to register more than 1,000,000 users. For every user a Stellar blockchain based account and wallet was created, and it is the only way to transact on the Diruna marketplace. Diruna allows payments in DRN which is their token and which runs on Stellar’s network.
Stellar Lumens vs Ripple
Many are asking what the difference is between Stellar Lumens and Ripple.
In fact they are complementary. Stellar has its roots in Ripple, as the founder was part of Ripple’s team many years ago before he founded Stellar.
This comparison table (source) shows how both compare and where they differ. We would summarize it as, other than some technical differences which are of secondary importance, both having a complementary target audience. Stellar Lumens will without any doubt be successful in this very large group of billions of unbanked people in the underdeveloped part of the world, but also in peer2peer transactions.
Stellar Lumens price forecast influenced by institutional investors
We said in our 5 cryptocurrency forecasts for 2019 that 2019 will be the year of institutional investing entering the crypto space.
Not only will we see Cryptocurrencies On The Nasdaq In 2019, which is an existing though huge trading platform, there are even brand new initiaves coming online. We also recently saw that Fortune revelead something very important. Bakkt, a cryptocurrency investment platform for institutional money which would launch in November (in the meantime delayed to 2019 because of delayed SEC approval) clearly sees a “war for institutional money waiting to investing in cryptocurrencies.” This is the quote that stands out:
For White, it was clear that Wall Street was ready to package digital assets for the masses––especially since cryptocurrencies strongly appealed to millennials. “In 2017, I saw a big shift,” he says. “The interest in Bitcoin and other currencies started changing from retail to the institutional side. But the level of infrastructure of the existing trading sites often didn’t meet their expectations. That’s why they’re waiting on the sidelines.” The big banks, says White, needed exchanges that provided the safety equivalent to what they enjoyed in trading equities, bonds or gold.
Indeed, institutional money will enter the crypto space, anytime soon, and they will certainly like the current low prices after the crash. This is the type of audience that likes to buy low, and is not concerned about the 2018 crash, on the contrary.
In our article published on Medium many months ago Why Bitcoin futures will fuel Ripple’s XRP price we said the following about Stellar Lumens:
Stellar Lumens: This is a fast growing crypto startup. The recent acquisition of Chain by Stellar makes this a much more trustworthy cryptocurrency. With this, they have clients like Visa, Citigroup and Nasdaq. As a decision maker to invest institutional money I would be very interested.
… and we followed up with this:
Our conclusion after doing this exercise? For institutional investors the highest level of confidence will probably be for Ripple and its XRP (XRP) token, followed by Bitcoin (BTC), Ethereum (ETH) and Stellar Lumens.
Stellar Lumens price forecast 2019: Watch the next crypto bull market
By far the most important reason why we hold a bullish Stellar Lumens price forecast 2019 is because of the fact that the crypto market will enter a new bull market in 2019 or 2020.
That’s because of the cycle which we tend to call innovation – speculation – adoption. It is the fundamental case we make for a continuation of the grand crypto bull market, and we have a much more detailed chart on our crypto & blockchain investing research service page. We also have much more detailed insights on the tokens that we believe will do well and outperform (in other words which cryptocurrencies should you hold).
2010 was the year that innovation with Bitcoin started, and a couple of years later there was a huge wave of speculation. Right after, it became clear that adoption of Bitcoin was not in line with expectations of speculators, and its price fell sharply in 2014.
2014 was the year that innovation with Ethereum started, and a couple of years later there was a huge wave of speculation. Right after, it became clear that adoption of Bitcoin was not in line with expectations of speculators, and its price fell sharply in 2018.
We strongly believe that the real crux of the crypto story will be based on security tokens and stablecoins. Not that payment services like Stellar Lumens or Ripple are not important, they really are, but the security tokens and stablecoins have such a disruptive effect.
Hence, we believe that the next wave of innovation started last year with Polymath, tZERO and the likes, combined with the 60 stablecoins, which will drive the next wave of innovation and associated speculation in the next 2 to 3 years.
Existing cryptocurrencies that survived and thrived the recent crash will do well.
This is the fundamental reason for publishing a bullish Stellar Lumens price forecast 2019.
Stellar Lumens price forecast 2019
Last but not least what do we read on the chart of Stellar Lumens.
This long term chart shows the previous cycle in the crypto market with this rising channel. It got broken to the downside earlier this year.The latest-and-greatest Stellar Lumens price forecast for 2019 and 2020: our base case forecast is 4 USD. #XLM #StellarLumens Click To Tweet
This implies that a new trend and related pattern is being developed. This will set the stage for the new channel formation in the next bull run. Although we cannot visualize this new channel because the chart software does not allow us to zoom out it is clear that this new rising channel will bypass the 4 USD mark provided the previous peak at $0.05 is respected which we strongly believe it will.
So our Stellar Lumens price forecast for 2019 and 2020 has 4 USD as a base case, and a much higher number as the most bullish case. However, we first need to know when the current decline will morph into a sideways consolidation before publishing our final price target.
In other words please be sure to come back and check our future revisions. You will be the first one to know if you become a member of our crypto & blockchain research service.