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Cryptocurrency has been on fire lately. However, the most talked-about token hasn’t necessarily been Bitcoin (CCC:BTC-USD) as Dogecoin (CCC:DOGE-USD) has made an incredible price move. I believe it’s time to consider the possibility that Stellar Lumens (CCC:XLM-USD) will be the next digital currency to take a moon shot, and traders can prepare by owning some Stellar Lumens.
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Don’t get me wrong. All cryptocurrencies are risky, so please don’t sell your belongings and load up on Stellar Lumens. These assets are meant for small positions, and you don’t have to take a position at all.
I recommended owning Stellar Lumens on Jan. 27, and the price doubled soon afterward. Of course, I just got lucky with that call. Now, traders have to decide whether to hold Stellar Lumens after the price surge.
Also, we should consider if it’s possible that Stellar Lumens will follow the same astounding trajectory as Dogecoin. I’d claim that it’s not only possible but also a realistic scenario. XLM is a perfect candidate for a Reddit-fueled price pump.
A Closer Look at the Stellar Lumens Price
Let’s rewind to mid-January when the XLM bulls had trouble pushing it above the 30-cent resistance level. To be honest, not too many folks were paying attention to Stellar Lumens at that time.
However, by late January, a slow ramp-up in Stellar Lumens would commence. The price touched 40 cents on Feb. 10.
Yet, that’s not the end of the story. All of a sudden, the buyers bid the Stellar Lumens price up to 60 cents on Feb. 12. That was followed by a cooling-off period, with Stellar Lumens settling at 52 cents on the morning of Feb. 15.
As impressive as that price spike has been, it’s nothing compared to the move in Dogecoin. Not long ago, Dogecoin was trading at 0.008 cents. On the morning of Feb. 15., it was 0.06 cents, which represents a change of +650%.
To sum it up, in the past few weeks, Stellar Lumens doubled but Dogecoin increased much more than that. Could Stellar Lumens catch up soon?
The Price Is Nice
By now, there’s a good chance that you’ve heard about the subreddit known as r/wallstreetbets. It’s basically a sub-group on Reddit that likes to discuss, and sometimes pump up, stocks, commodities (particularly silver) and cryptocurrencies.
Why do the Redditors choose to pump up certain assets, but not others? It’s hard to know what makes the r/wallstreetbets crowd tick, but we can try to find some clues.
I’ve noticed that they like to target lower-priced assets. A few examples would include BlackBerry (NYSE:BB) stock, AMC Entertainment (NYSE:AMC) stock and silver, which is much cheaper than gold on a per-ounce basis.
Dogecoin would also fit into that category. Even after the price pump, it’s still not even worth a penny per coin. Perhaps its low price made it a prime target for Redditors as they could more easily buy a low-priced asset.
It’s a Musk-Have
The r/wallstreetbets users weren’t the only people who helped to move the Dogecoin price recently. Evidently, Dogecoin caught the attention of Tesla (NASDAQ:TSLA) CEO Elon Musk as well, as Musk has tweeted about Dogecoin.
If it’s a Musk-have, then it’s a must-have, or at least that’s what some traders seem to believe. I don’t know how much Dogecoin Musk owns, or whether he owns it at all, but the mere thought of it was apparently enough to move the price much higher.
The Reddit users and Musk appear to have something in common: They like to root for underdogs. Dogecoin was thought of as a joke at one point, but now it’s being taken much more seriously.
It wouldn’t surprise me at all if Musk or the r/wallstreetbets users set their sights on Stellar Lumens next. Like I said earlier, it passes the low-price test.
But it also has a populist appeal as it’s tailor-made to allow individuals to allow users to send sums of money and convert currencies cheaply and conveniently.
The Bottom Line
Granted, it’s a speculative bet to own Stellar Lumens in the hopes of a price pump from the Reddit crowd or from a Musk tweet.
Therefore, this type of wager is only appropriate for a small position size. Nonetheless, it’s an exciting idea and Stellar Lumens is definitely worth keeping your eye on.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.