The owner of cryptocurrency channel Coin Bureau talked about what could happen to the price of Stellar (XLM) next year after the lackluster performance of its XRP rival in 2021.
In a new video, analyst Guy stated that while Stellar (XLM) has doubled its price this year, the altcoin’s gains are “light” compared to the performance of other crypto assets.
According to Guy, Stellar’s low price performance can be attributed to one root cause: sales pressure from the Stellar Development Foundation (SDF), a nonprofit organization dedicated specifically to the development and growth of the Stellar network.
“The foundation received only $3 million in its inception. As far as I know, it has not received any additional funding since then. This means the foundation is relying on XLM sales to pay for its expenses and fund the expansion of Stellar’s ecosystem, which is not speculation. The foundation’s XLM expenditures are clearly detailed on the mandate page, and I applaud them for their transparency. The latest figures reveal that the foundation has spent more than 5 billion of its 30 billion XLM so far, of which around 3 billion has been spent over the past year. Moreover, the statement says that this framework will be used for 10 years. In other words, the selling pressure won’t stop anytime soon. ”
Guy also says that in addition to the constant selling pressure, XLM doesn’t seem to have much of a demand factor. According to the crypto analyst, institutional investors are staying away from the crypto asset, possibly due to regulatory uncertainty regarding XRP.
But Guy says the positive results from SDF’s partnership with MoneyGram could allow XLM to bounce back to its record high of $0.87 on January 3, 2018.
In October, the remittance giant announced that it had integrated the Stellar blockchain into its network, providing cash financing and payments in local currency for consumers using Stellar USD Coins.
“The only request for XLM comes from the institutions the Stellar Development Foundation has partnered with, and these partnerships are just starting to take their final form. On the bright side, this paints a pretty optimistic picture for XLM in 2022 and if the MoneyGram partnership lives up to its promises, we could see XLM retest its early 2018 highs. Stellar also has no shortage of upcoming milestones that could attract both retail and corporate interest. ”
XLM, at time of writing 0. 286089 was trading at the dollar.
