Stellar Lumens is the native token for the Stellar protocol that seeks to provide a cheap and efficient way to transfer capital internationally between people, institutions, and businesses. Its founder Jed McCaleb was the co-founder of popular platform Ripple, and essentially Stellar Lumens looks to provide a similar service but in a more decentralized fashion.
As a token that sits as the 30th biggest on the market, there is clearly room for it to grow. It has meaningful utility, a great team behind it and it certainly tackles a real-world problem, and not one limited to just on-chain activity.
This article will tell you everything you need to know about Stellar Lumens, where you can buy it, how you can buy it, and advise if now is the time to buy in.
Best Way to Invest in Stellar Lumens in 2023
Stellar Lumens is a somewhat popular token in today’s market but certainly is best described as a fringe Altcoin. For this reason, there are limited ways in which you can invest in it. Here are some of your best options:
What Is Stellar Lumens - Quick Overview
Name and ticker Stellar Lumens (XLM)
Date launched July 2014
Circulating supply | max supply: 24,800,000,000 | capped
Blockchain network Stellar blockchain
Creators Jed McCaleb and Joyce Kim
Use-cases Cross-border transactions, fast transactions, cheap transactions, DeFi, stablecoins
What Is Stellar Lumens – Explained
Stellar was born in the same way as many of the most popular Altcoins on the market have been - via a split of the founders from one of the first cryptocurrency projects to hit the market, which in this case is Ripple. People have often called Stellar a clone of XRP, but founder Jed McCaleb dismisses this, stating that there are plenty of key differences including the code it runs on - there are however notable similarities.
The team that makes up the project is notably a strong one; as well as co-founder of Ripple Jed McCaleb there are three other core members. They are Stellar Lumens co-founder and lawyer Joyce Kim; Chief Technical Officer Nicolas Barry, who formerly worked with Microsoft and Salesforce specializing in building large systems; and finally, Chief Scientist David Mazieres who is a Stanford University computer science professor. As well as these core members Stellar also has a rich and well-balanced group of advisors; their team is notably one of the project's strengths.
How It Works
Stellar Lumens work in a similar kind of way to Ripple, but the key difference between the two platforms is that Stellar is more open-sourced. On the Stellar network, anyone is able to be a validator and manage a node, whereas with the Ripple system this is not the case and validators must be preassigned.
Essentially, this means that Stellar Lumens is a decentralized alternative to Ripple. Its purpose is to act as a way to transfer money internationally between people, institutions, and businesses, but in a way that is better, faster, and cheaper than the other market alternatives.
The idea is to facilitate a way of transferring money without even needing a bank account; instead, users can upload money to the native ‘anchor’ which is then converted onto the Stellar ledger that facilitates easy international transfers.
Clearly, this looks to solve a big problem in global finance; transferring money abroad is often expensive or time-intensive, or both.
XLM Use Cases
Helps reduce the cost of international transfers; it's faster and cheaper than financial institutions.
Connects several mobile financial platforms at one time; this gives users, maybe a business, for example, the opportunity to pay people via different means without costing them any extra overheads.
Uses XLM to launch an ICO (independent coin offering); you can use the network to launch and promote your own project.
Stellar Lumens currently sits as the 30th largest cryptocurrency on the market today. XLM’s pattern of growth and decline is somewhat similar to many Altcoins. The crypto boom of 2017 saw it soar from around $0.03 all the way up to $0.90. This was however short-lived and soon after it began to plateau at around $0.30.
XLM enjoyed yet another boom in May 2021 of up to $0.70 and has now again plateaued at just above $0.30. Currently, it is at a low point of $0.18 as almost all cryptocurrencies endure the latest plummet of crypto markets.
There is definitely room for XLM to grow into, and its main competitor Ripple sits well ahead of it at position number nine. XLM is definitely worth researching and keeping an eye on simply for this reason - with many Altcoins now establishing themselves on high positions in market cap, it is the smaller coins with good utility (like XLM) that have the potential to get those bigger gains.
How To Buy Stellar Lumens
To buy any token you will need an interface. There are a host of different options for you, but most will require you to verify your identity and create an account with some sort of platform. Here we have laid out your options.
You can buy XLM using any of the following platforms:
Brokerage: XLM is available on a limited range of brokerages compared with other cryptocurrencies - however, it is supported by eToro.
Exchange: Almost all exchanges will list XLM because they offer a good range of variety and it's one of the popular tokens to trade on the market; exchanges provide slightly lower fees than most brokerages but can be more complicated.
Decentralized Exchange (DEX): These operate in the same way as a traditional exchange, but are unregulated and are not owned/operated by a singular entity. DEXs usually have a great range of coins for users to choose from as they are a key part of the blockchain metaverse and have almost no restrictions.
P2P: Person-to-person exchanges offer great rates due to the lack of a middle man; it's best to think of this as swapping rather than trading.
Follow this link to view Stellar Lumens’ dedicated buy page on popular broker eToro: https://www.etoro.com/markets/xlm
How To Sell Stellar Lumens
You can sell your XLM using any of the methods we have shown above under How To Buy Stellar Lumens. Again, most platforms will require you to verify your identity and create an account; additionally, you will need to own the token directly or via a derivative.
With some platforms, like an exchange, you are able to transfer any holding of XLM you may already have to that platform and then sell it there. Whereas with something like eToro you will first need to buy XLM on the platform, and then also sell it there.
We advise that you first check the fees you may incur when transferring crypto assets from platform to platform as it can be quite costly.
Alternative Ways To Invest in Stellar Lumens
As the crypto space merges with traditional financial products, we are seeing a notable expansion of the ways in which investors can own their assets. Stellar Lumens is just in the top 30 largest cryptocurrencies, so there are some alternative avenues for the investment you can look into; however, it is somewhat limited compared to some other more popular coins/tokens.
Here is a breakdown of some of the alternative ways you can invest in Stellar Lumens:
Contracts For Difference
You can use brokerages to buy XLM CFDs; CFDs are a contract you agree to when you complete your purchase. They pay you rewards if the asset price rises or you incur losses if it goes down. You do not own or hold the asset with derivatives.
Trusts are essentially a pot of managed assets of funds. They are legally managed by a legal entity that has the right to manage these assets for the benefit of a third party. Grayscale Investments now offers the Grayscale Stellar Lumens Trust to investors; this is tradable on OTC markets.
XLM is not currently available to buy in any of the following ways:
Is It Safe To Invest in Stellar Lumens Right Now?
Crypto markets are extremely volatile and carry huge risks, so we advise you to always be careful with these assets and your own due diligence. The same especially applies to CFDs; 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Stellar Lumens is definitely crypto to watch. Firstly, it has a good range of use cases that have valuable utility both on and off-chain. Secondly, its team is strong; it has a mix of technical experts and even some with robust experience on ICO projects with its founder Jed McCaleb. Thirdly, there is some good room for this project to grow if we look at the market cap. As the main rival to Ripple (the 9th largest crypto) and situated as the 30th biggest by market cap, there is definitely the possibility for XLM to grow and get those big gains.
Not only this, but it is yet to reach its all-time highest point of around $0.70. Although this occurred at one of the biggest crypto booms, it still leaves a good chance of reaching these again, and possibly even challenging higher prices.