A large portion of the cryptocurrency space is pitching Stellar (XLM) against Ripple (XRP) right now. Some see the success of two coins as mutually exclusive, with the suggestion that the success of Ripple will make Stellar’s journey to mainstream adoption all the more difficult and vice versa.
We think this is nonsense.
To hijack (and twist) the words of Nick Grindell, this town sure is big enough for the both of them.
Right now, Ripple goes for around $1.30 a piece. Stellar Lumens, on the other hand, go for less than $0.55 a piece. But price isn’t the only metric we should be focusing on here. Market capitalization (and, indeed, the disparity in this metric for both coins) is even more telling – Ripple is currently sitting on a market cap of more than $48.6 billion. Lumens, on the other hand, command a market cap of less than $10 billion. So XRP is trading at a little over twice the price of XLM but just shy of five times the market capitalization.
We think there’s some balancing out to do there and we’d be very surprised if it wasn’t Lumen revaluing to the upside as opposed to the other way around.
But it’s not all about metrics.
There are other factors in play here – fundamental factors – that contribute to a bullish bias on both coins, weighted towards Lumen in the near term.
Ripple has gained strength over the last couple of weeks (subsequent to its early to mid-January lows below $1 a piece) on the back of the company reporting numerous fresh partnerships with enterprise-level companies – MoneyGram, Santander and more. These partnerships have served to reinforce the real world application of the company’s technology and its underlying coin, XRP, and markets have bought up XRP in line with this statement.
We’ve also see Stellar score some big partnerships, however, with some of the most notable being IBM, stripe, Deloitte, and more, yet the company hasn’t really benefitted in line with these developments – at least not to the degree that Ripple has, that is.
Perhaps it’s because the team over at Stellar is more of an entrepreneurial group of startup founders, as compares to the investment bankers and enterprise executives that head up Ripple. Perhaps its because Stellar is targeting individual use cases aimed at consumer spending as opposed to the big ticket interbank finance that Ripple is targeting.
Perhaps it’s both of these things.
Just maybe, however (and we think that this is actually more of a just maybe but we don’t want to get overenthusiastic about it), this is a case of publicity lag.
Ripple is making waves across pretty much every mainstream financial (and other) news outlet globally. Stellar is just about getting started doing the same (as illustrated by a quick mention on CNBC’s Fast Money last night) but it’s a long way off drawing the speculative volume that Ripple has picked up as its name has moved out of the crypto-umbrella and into the glow of mainstream industry.
When this happens (and it’s happening right now, take our word for it), Stellar and in particular XLM is what the crowds are going to flock towards.
Again, we’re not saying that readers should go out and convert all of their XRP to XLM. XRP is an incredible technology and it’s going to be a driving force behind the rejuvenation of the global financial system. Bailing out of an XRP position right now be ill-informed.
What we are saying, however, is that a position in XLM could be a nice portfolio addition, complementary to an existing XRP holding.
Long XRP, long XLM.
We will be updating our subscribers as soon as we know more. For the latest on XLM, sign up below!
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency.
Image courtesy of Stellar
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