Stellar (XLM) has emerged as one of the top-performing coins this week, becoming the third-biggest gainer in the market.
The price of XLM, the native cryptocurrency of the Stellar network, has surpassed $0,24 per unit, driven by several factors including the adoption of the network by major financial institutions and the drag effect of the rise in the price of Bitcoin.
According to data from CoinMarketCap, the price of Stellar (XLM) has surged by over 100% over the past week, from trading at $0,123 on Nov. 14 to over $0,241 at the time of writing.
Source: CoinMarketCap
What factors drive Stellar's price?
One of the main factors that has influenced the recent rise in the price of Stellar is institutional adoptionFranklin Templeton, one of the world's most prominent fund managers, has become a crucial catalyst for the rise in the price of XLM, after announcing the adoption of this blockchain to manage its assets in a more optimized and efficient way.
The fund manager said it will use Stellar’s blockchain technology to tokenize its assets. The firm said its BENJI tokenized asset platform, initially launched on Aptos, has expanded to Stellar to optimize the secure management of its more than $1,7 trillion in assets under management.
Franklin Templeton’s decision to incorporate the Stellar network into its U.S. government monetary fund is no small step. The efficiency and security of the Stellar network have been crucial to Franklin Templeton’s asset management. By using Stellar, the fund manager has managed to reduce operational costs and improve transaction speed, which benefits both the company and its investors.
This news has had a direct impact on the price of Stellar. However, experts have also pointed out that The drag effect of the rise in the price of Bitcoin, which recently conquered a new all-time high (ATH) above $96.000, has also contributed significantly to Stellar’s rise.
Experts have pointed out that the crypto market tends to move in tandem, and the recovery in Bitcoin price has generated positive sentiment that has benefited other cryptocurrencies, including XLM.
Institutional support for the Stellar network
The Stellar network has gained the backing of a number of organizations, including the United Nations. In 2023, the organization initiated a pilot project to use Stellar technology in humanitarian aid programs, demonstrating the network’s ability to improve efficiency and transparency in the distribution of funds.
Also, in April of this year, when Franklin Templeton launched its US Government Money Fund, announced that the fund's transfer agent was using the Stellar network in its proprietary system for transaction activity to maintain the official record of ownership of the fund's shares.
This endorsement has reinforced the credibility of the Stellar network and attracted more institutional investors to the blockchain ecosystem.
The impact of XLM price on market capitalization
As a result of this price increase, Stellar’s market cap has increased significantly. Stellar currently ranks 20th on the list of cryptocurrencies by capitalization, consolidating its position as one of the most valued coins in the sector. Experts have noted that this growth not only reflects investor confidence in Stellar’s technology, but also its potential to continue expanding in the future.
What is Stellar?
Stellar is an open-source blockchain platform designed to facilitate financial transactions globally. It was founded in 2014 by Jed McCaleb, one of the co-founders of Ripple, and has since become known for its focus on financial inclusion and efficiency in money transfers.
The Stellar network uses its own cryptocurrency, called Lumens (XLM), to facilitate transactions and ensure network security.
IMPORTANT: The content of this article is for informational purposes only and, in no case, what is written here should be taken as investment advice or recommendations. Bit2Me News reminds you that before making any investment you should educate yourself and know where you invest your money, as well as the pros and cons of the system. We separate ourselves from the actions and consequences that ignorance may entail. If you decide to invest in this or another asset class, you are solely responsible for the consequences that your decisions and actions may have.
