Due to the cryptocurrency bull market of 2021, some digital tokens that used to be cheap are now quite expensive. That’s not currently the case with Stellar Lumens (CCC:XLM-USD) as you can still pick it up for less than $1.
Actually, I might have to retract that last statement, as XLM is moving so quickly against the U.S. dollar that by the time you read this, the price could be significantly higher.
I tried to get people on board with Stellar Lumens back in February, when I issued a bullish call on it. At that time, I envisioned a “road to $1” and today, that milestone is within reach.
Just be sure to exercise caution, as the following price action analysis will show that XLM is a fast mover, and by that I mean in both directions.
Analyzing the Stellar Lumens Price
No doubt about it — Stellar Lumens has a wide 52-week range. During the past year, it’s been as low as 6 cents and as high as 77.8 cents.
But if you’re assuming that it’s been a smooth ride, you’re quite mistaken. Without a doubt, many retail traders were shaken out during the stomach-turning price corrections in January, February, and April.
In order to be profitable in the long term with cryptocurrency, you’ll have to have strong risk tolerance. When the going gets tough, staying in the trade has generally been the right thing to do.
That’s certainly been the case with Stellar Lumens. Even with crashes of 20% or more along the way, the price was close to 66 cents on May 12. That’s close to the 52-week high and well over halfway to the all-important $1 milestone.
Progress Through Partnerships
I’m definitely glad that I constantly keep up with the writing of my colleagues.
Otherwise, I would have missed out on InvestorPlace contributor William White’s excellent update on Stellar Lumens.
White specifically highlighted the large number of partnerships that Stellar — or more accurately, the Stellar Development Foundation (SDF) — has forged with successful businesses.
You can browse through the complete list on the official Stellar website. Here’s a sampling of some of the most noteworthy partners:
- Mobile and web wallet Lumenshine
- Nigerian crypto gateway and stablecoin issuer Cowrie
- Investment bank Kapilendo
- Swych, a platform for gift card asset transfer
- Tokenized precious metals issuer MINTX
- Mobile wallet specialist Ownbit
- Multi-signature provider and asset custodian BitGo
I could keep going because Stellar has numerous business partners.
It’s a savvy strategy to collaborate with many businesses as this could introduce Stellar Lumens to more users.
Grayscale Scales Up
An essential part of the mainstreaming process for any up-and-coming cryptocurrency will be the involvement of large-scale asset managers.
Some folks would call this the “smart money” getting involved. It’s important because these fund managers can influence asset prices.
Granted, we might not see banking giants loading up on XLM just yet. However one forward-thinking institutional investor recently upsized its holdings.
I’m referring to Grayscale, which happens to be the world’s largest cryptocurrency asset management firm. Amazingly, Grayscale revealed that it holds $46.1 billion in crypto assets.
Moreover, it’s been reported that Grayscale holds 5,566,271 Stellar Lumens. That’s a whole lot of XLM, even if it’s a relatively cheap coin.
You’ve got to hand it to Grayscale for getting into the cryptocurrency game early and with gusto. It takes a certain level of confidence to back up the proverbial truck and buy millions of crypto tokens like Grayscale did.
I’m going to assume that the firm did its due diligence before purchasing all of that XLM. And, it wouldn’t surprise me if Grayscale’s big bet pays off in 2021.
The Bottom Line
Not everyone will be convinced to buy a cryptocurrency after it has zigzagged multiple times in both directions.
I’ll admit, Stellar Lumens is prone to volatility. Still, the overall trend is to the upside — and with the mainstreaming process under way, it’s easy to envision XLM pushing higher.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
David Moadel has provided compelling content — and crossed the occasional line — on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
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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.