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Disappointed with the low XRP figures in 2021, the leading crypto channel Coin Bureau presented a forecast for its competitor Stellar (XLM) for the next year.
In a new video, an analyst under the pseudonym Guy told his 1.78 million YouTube subscribers that despite doubling in price this year, Stellar (XLM) is outperforming many altcoins in terms of growth.
Guy said Stellar’s low price performance can be attributed to one key reason – pressure from sellers, in particular from the Stellar Development Foundation (SDF), a nonprofit that develops and grows the Stellar network.
At the time of its creation, the fund received only $ 3 million. As far as I know, since then it has not received additional funding. This means that the fund relied on XLM sales to pay for its costs and expand the Stellar ecosystem, and this is not speculation. The fund’s costs for XLM are clearly described on the page, and I applaud this transparency.
The fund has spent over 5 billion of the 30 billion XLM so far, and about 3 billion XLM have been spent over the past year.
Here’s what their document says: “When we first announced this structure in November 2019, we intended to use most of the Lumens for 10 years, ideally earlier.” In other words, selling pressure will not end anytime soon.
Aside from constant pressure from sellers, XLM has little reason to stimulate demand. Institutional investors are shying away from cryptoassets, according to the cryptanalyst, possibly due to regulatory uncertainty surrounding XRP.
However, according to Guy, the fruits of SDF’s partnership with MoneyGram could allow XLM to return to its record high on January 3, 2018 at $ 0.87.
In October, the money transfer giant announced that it would integrate the Stellar blockchain into its network, allowing it to receive cash funding and local currency payments using Stellar USD Coin (USDC).
The demand for XLM comes only from the organizations that the Stellar Development Foundation partners with, and these partnerships are just starting to show results.
This paints a pretty optimistic picture for XLM in 2022, and my guess is that XLM will retest the early 2018 highs if its partnership with MoneyGram is successful. Stellar has the potential to attract both retail and institutional interest.
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