Stellar is similar to several other blockchain platforms in that it is a decentralized payment system. The software was released in 2014, and since then, the developers have been working hard to resolve many of the issues faced by today’s financial system.
The distributed ledger technology works by harnessing the power of decentralized servers, which store data that is updated every few seconds. One of the most distinctive aspects about this platform is how it handles consensus.
Stellar differs from other blockchains that employ a similar consensus mechanism as Bitcoin. Stellar takes a distinct approach when it comes to determining who is trustworthy. Each node employs the FBA algorithm (Federated Byzantine Agreement) to “pick” several other nodes it believes are reputable. As a result, transactions on Stellar are considerably quicker, and the network can handle up to 1000 transactions per second.
Stellar’s history of price changes
Since its debut, the Stellar native token XLM has had an unusual trajectory, I’d say. It didn’t track market movements as closely as other altcoins I’ve discussed previously.
XLM’s price was relatively low for the first several years of its existence. One of the reasons is that it was early in the history of cryptocurrency, and the second is that there was no real-world application. Stellar’s price ranged from a fraction to nearly $0.05 between 2014 and mid-2017. Then, in June 2017, the price rose almost to $0.05 before plummeting to approximately $0.01 over the next two months.
By the end of 2017, Stellar announced that it would collaborate with IBM, which drove up the price to almost $1. The price plummeted and hit a low of $0.2 by the end of March 2018. The Stellar cost then rose dramatically to $0.43 in April 2019.
On July 10, 2019, the price of Bitcoin was closer to $3,500 than it had been in a long time. Early on Tuesday morning, the cryptocurrency’s price plummeted by 24%, or $300 per coin. It took until October 2020 for Bitcoin to recover all its losses and reclaim the initial value of around $3,000 per unit. The graph then dips before beginning an ascent that ranges from roughly $0.1 in January 2021 to approximately $0.07 in October 2020 (in one year).
Then, for the next several months, the price rose dramatically, peaking at just under $0.7 in May 2021. September and November saw two more spikes. The market as a whole began to plummet soon after, with Stellar’s gravity pulling it down to around 20 cents per coin by February 2022.
What Influences the Price of Stellar Coins?
One of the most perplexing problems that investors encounter is how a cryptocurrency price may fluctuate and what causes it to change. In general, many factors have the ability to shift the prices significantly.
The price of a platform can suddenly jump up when it partners with well-known businesses, and the marketing alone is enough to do the trick. Take a look at how much Stellar’s cost increased after announcing its collaboration with IBM and then again after. While there are no major rumors about potential collaborations between Stellar, a significant one may easily raise the price.
The price of a cryptocurrency is also determined by its overall popularity and trading volume. Consider this: every time a well-known figure extols the virtues of bitcoin, the price goes up. Of course, these trends don’t last long, but if you stay on top of them, you may make a nice profit. The same applies in the other direction. If someone denigrates a specific cryptocurrency, people panic and sell, which causes the price to drop.
Crypto regulations have been a major topic in the market for some time. While many people believe that regulated crypto strays from the original concept, others feel it is the only way to get adopted. Depending on whether or not it takes action, mentioning crypto regulation may raise or lower prices. If a larger country like China outlaws cryptocurrencies, the price will fall since fewer people would trade them. The price will rise if they start taking bitcoin as payment; conversely, if they reject cryptocurrency as a payment option, the price will decrease.
Everything comes down to supply and demand. The higher the price of crypto can rise, the more it is used and traded.
