Stellar Lumens Price Prediction Forecast

Stellar Lumens Price Prediction Forecast: Digital currencies have become a topic of interest over the last decade as cryptos like bitcoin have turned some investors into millionaires. The Stellar Lumens price prediction forecast doesn’t suggest that XLM, as the coin is called, will reach the heights of bitcoin, but many people believe that it will increase enough to generate generous profits. 

On the other hand, the Stellar Lumens coin has suffered a few falls since it was released in 2014. The sudden drop in price has many investors wondering whether the coin will fully recover or should they dump their coins to protect themselves from future losses.

What Is Stellar Lumens Coin (XLM)?

The Stellar Lumens coin, XLM, has a different goal from most digital currencies. Usually, an initial coin offer (ICO) raises money that a company can use to fund growth. The coins act very much like stock shares. Investors buy coins from the company, the company receives money, and the investors wait for their investments to grow in value. 

XLM’s value fluctuates, but Stellar didn’t create the coin just to raise money. Stellar is working toward building an international trading system that lets people buy, sell, and trade money without paying heavy fees or losing value through exchange rates.

For example, a retailer can buy Stellar Lumens with USD and use the XLM to pay a manufacturer in Mexico. Similarly, individuals can send money to friends, family members, and colleagues in other countries without the excessive fees of traditional transfers. 

Stellar Lumens provides an excellent option for remittances, when workers in one country send money across borders to help family in a different country.

According to Stellar, most remittance transactions fall between $200 and $300. The fees associated with remittance payments often cost 15% or more. Recipients may need to pay an extra 8% to access their cash. In total, you could lose 23% or more of remittance payments. That means $100 turns into $77 by the time it reaches its destination.

Stellar Lumens aims to lower the cost of remittance and other international payments so more value reaches the recipient. 

When you look at the values of most cryptos, you will see that they cost much more than $1 (bitcoin costs tens of thousands and Ethereum is catching up in a hurry). XLM strives to stay as close as possible to $1. That way, it can offer something very close to a 1 for 1 exchange rate for international payments.

Why Did Stellar Lumens Fall?

In 2018, XLM debuted at $0.30. Mild skepticism kept the value between $0.20 and $0.30 until just before 2019, when the value suddenly plummeted to $0.10 and continued to hover around that price, lifting to $0.15 on some days and falling to about $.06 on others. 

At this point, investors had an excellent opportunity to grow wealth by purchasing XLM at nearly nothing. Assuming that the currency would eventually reach $1, buy at $0.10 or so would have netted a massive 900% gain. In other words, spending $100 to purchase 1,000 $0.10 coins could potentially create an investment return of $900 ($1,000 – $100 = $900).

Unfortunately, XLM never broke above $0.20. Near the beginning of 2021, something started to change. Between January 2 and February 5, the price of XLM jumped from $0.23 to $0.55. After some ups and downs, the value piqued at $0.70 in mid-May. Now, some investors and onlookers wondered whether XLM could meet its goal. Could it really reach an even exchange rate with the US Dollar?

Regardless, early investors now found that they had accumulated massive returns from a level of growth rarely seen in any market.

Then, something catastrophic happened. Stellar Lumen fell below $0.30, losing more than half of its value in a matter of days.

Why did Stellar Lumens fall? A few factors probably influenced its loss of value. First, the Stellar community voted to stop making more Lumens after November 2019. This decision makes sense from an environmental perspective. Coins that rely on constant mining require more and more energy. For example, some claims – though it’s debatable – that each new bitcoin mined by someone takes more energy to create than the previous one.

The increased energy helps ensure that bitcoin becomes more scarce over time. Unfortunately, it has also encouraged some bitcoin whales to start large mining warehouses that use massive amounts of electricity.

Capping the total number of Stellar Lumens early helps avoid environmental issues. At the same time, it means that new investors don’t have as many opportunities to buy coins. Currently, about 20 billion coins are in circulation. The Stellar Development Foundation controls the other 30 billion. Since no one knows what the foundation will do with its coins, a lot of investors feel uncomfortable buying those currently available in the market. 

The sudden collapse of bitcoin also probably influenced the drop in Stellar Lumens price. The two currencies are not intrinsically linked. In fact, Stellar has put in a lot of effort to keep Lumens separate from other digital and fiat currencies. 

The market, however, sees a connection between bitcoin and nearly all currencies based on blockchain technology. When bitcoin fell, it took a lot of digital currencies with it.

Will Stellar Lumens Price Recover?

It’s impossible for someone to honestly say they know Stellar Lumens price will recover. A value increase, however, seems likely. The coin has already gained quite a bit of value over the last few years. Some investors see the price drop as a correction. Others see it as a moment of fear that rippled out from bitcoin’s sudden drop. 

The fact of the matter is that you can purchase Stellar Lumens for next to nothing. Stellar only requires that you hold a tiny amount of its coin in your account. With the right timing, you could purchase hundreds of Lumens for about $100.

Imagine if you had the opportunity to purchase one whole bitcoin for pennies in 2009. Don’t confuse such an opportunity with XLM now. Stellar Lumens supply of coins is already in the billions whereas Bitcoin’s won’t exceed 21 million so the price point, even if similar success were enjoyed, would not even come close to approaching that of bitcoin’s.

Stellar Lumens Price Prediction By Experts

Crypto experts have diverse opinions regarding the price of XLM. Most, however, believe that Lumens could reach $1 within the next couple of years. It came extremely close recently, so a jump to $1 wouldn’t surprise many people. In fact, it could go as high as $3 by the end of the year.

XLM investors benefit from its extremely low price. Buying now looks like a good opportunity to most people because they do not need to risk much. As more investors decide to purchase a few hundred dollars of Lumens, the price will start to climb. 

This is a function of network effects and Metcalfe’s Law that positively influences the price of just about every major coin, from Bitcoin to Ethereum. Similarly, Google and Facebook prices per share ramped higher over the years as the network effect grew for each company.

How High Will Stellar Lumens Go?

How high can the price of Stellar Lumens go? That depends on how bullish investors become. The coin’s value depends on how much faith investors have in its ability to succeed.

Theoretically, there isn’t a limit to how high Lumens could go. Realistically, it could break the $10 mark. It’s unlikely to go much higher based on the supply of coins however.

If you feel skeptical about those statements, remember that hardly anyone a decade ago thought that bitcoin would surpass $100.

Is Stellar Lumens A Good Buy?

The world of digital currency grows daily. You cannot get too wrapped up in all of the new coins coming out. Stellar Lumens has never been a particularly expensive coin, but it has lasted much longer than some expected. After all, it’s older than Ethereum.

As more people become aware of the environmental harm crypto mining causes, investors could turn to Stellar Lumens as a low-energy alternative. 

More likely than not, Stellar Lumens is a good buy. Like any crypto investment opportunity, though, no one knows how its value will evolve and whether the project will gain traction.

Can Stellar Lumens Reach $10?

At the moment, Stellar Lumens is having a hard enough time reaching $1. It very well could reach $10 or more in the future. Don’t expect it to happen overnight, though. For that type of return, you would probably need to wait for the value to grow over several years.

Stellar Lumens Price Forecast: The Bottom Line

Most Stellar Lumens price forecasts show the coin’s value increasing over the next few months and years. If you want to explore the option, you can buy a small number of coins and monitor their values for a while. Once you start to feel more comfortable, you can invest more money in coins that could become much more valuable within a decade.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.