After a massive decline over the last week, Stellar has rebounded surging to $0.66. Its current market cap is almost $12 billion and it currently ranks amongst the top 10 cryptocurrencies in the world.
Stellar started rapidly surging towards the end of 2017 and continue to soar up till January 4th to hit an all-time high of $0.92. However, the altcoin decline started after that which saw many cryptocurrencies such as Ripple face massive losses. Stellar also faced a massive decline in value as it reached its lowest point of the year yesterday at $0.44. The currency has soared back up to $0.66 and it’s now the 8th largest cryptocurrency in the world.
There are many explanations for this sudden rebound in value. One of them being that it’s a currency quite similar to Ripple, a cross-border solution. Its value plunged to less than half of what it was on Jan 4th. This allowed people to seize the opportunity to buy it when its cheap before it surges rapidly again.
Many people who missed out on the Ripple growth saga tend to invest in Stellar because of its similarity to Ripple. That’s also a reason for Stellar’s growth.
It can also be argued that the growth came because of a particular person. The increase in Stellar’s price occurred after a CNBC segment in which a contributor, Brian Kelly, the founder of the BKCM Digital Asset Fund stated that Stellar could be the “next coin to surge”.
Many people have joined the crypto market as ones following the crypto trend, who invest without knowing much about cryptocurrency hoping to hit the jackpot. So, when influential people give out endorsements to cryptocurrencies, said currencies will see an increase in demand. Something similar happened to the Verge cryptocurrency when John McAfee claimed Verge to be one of the cryptocurrencies of the future.
Perhaps the most likely reason to have contributed to Stellar’s growth is Ripple. Many experts claim that Stellar mimics what Ripple does since both cryptocurrencies have the same founder. It may be true since both digital currencies have the same goal: to create cross-border payments easier and cost-free.
Jeff Mahony CEO of Ubiquicoin, claims that Stellar is a Ripple clone which is riding the coattails of the more popular and successful currency.
This may be true since one of the main reasons Stellar got so much attention was the fact that many people had missed out on benefitting from Ripple’s immense growth so they settled for the lesser popular version of the kind of same currency.
However, a counter-argument to this is to simply analyze Ripple’s performance over the past few days. It is true Ripple started the year well just like Stellar but given the latter’s recent surge, surely Ripple must also be doing well?
As seen in the image above, that is not the case as Ripple has seen massive fluctuation in the last seven days and it has mostly gone down. Its value is down around 2% in the last 24 hours as well. It currently sits at $2 in value, which is far from its highest point of $3 a week ago.Many people also claim that Stellar is the better version of Ripple which is why its value was bound to go up again. Kain Warwick, founder of Havven feels the same way as he said: “Arguably it has a lot more potential than Ripple. It also has the ability to launch ICOs, one of the major drivers of the price rise in ether over the last 18 months.”
Jed McCaleb, who founded both Ripple and Stellar says that he considered all the problems and errors with Ripple and created its perfect version in the form of Stellar.
Stellar also has the support of many large firms as its partnered with IBM (NYSE: IBM), Deloitte, Wanxiang Labs and Stripe. Pundi X has also started integrating with Stellar, which will make Indonesian Rupiah cross-border payments faster and less costly.
— Pundi X (@PundiXLabs) January 10, 2018
Therefore, it’s not entirely true that Ripple is the reason for Stellar’s success. Stellar has now come into its own. Stellar, alongside Ripple, will provide banks a much needed cheaper solution for making international payments. Not only is making international payments slow currently, it’s also costlier which leaves many banks at a loss if the amount is not big enough.
Stellar is set to revolutionize the banking system in the future. It’s best to invest in it now while it costs below the dollar before it takes off and becomes much more expensive. Not only is it a great investment in terms of the potential returns one can get, but also as a fast cross-border payment solution.