XLM’s price is following XRP up on a rough day for cryptos, but there may not be a connection between the two.
With all the buzz hovering around XRP and the legal case versus the SEC. While XLM has risen 1.9% to $0.084 in price as well, it is not a part of Ripple labs, and isn’t connected to XRP. That said, both XLM and XRP are designed to facilitate fast and low-cost cross-border transactions, and they use similar consensus mechanisms for verifying transactions.
XLM could be following XRP up
With regards to the current situation, XRP has been in a legal battle with the SEC since December 2020, when the SEC filed a lawsuit against Ripple, the company behind XRP, claiming that XRP is an unregistered security. This legal battle is leaning more towards Ripple Labs as the favorites to win the case as investors and traders dive prudently into the XRP and XLM.
On the other hand, XLM has not been involved in any legal issues with regulators, which may make it a more attractive investment option for some investors who are looking for a cryptocurrency that is not facing any legal uncertainties.
Furthermore, XLM has been making some notable partnerships and developments that could be contributing to its price increase.
For example, in December 2020, the Ukrainian government announced that they would be using the Stellar blockchain to create a central bank digital currency (CBDC). Additionally, in February 2021, the USDC stablecoin was launched on the Stellar network, providing more liquidity and use cases for the XLM cryptocurrency.
In short, the exact reasons for the price increase of XLM in correlation to XRP’s legal situation cannot be determined with certainty.
Even so, it is plausible that XLM’s absence of regulatory problems and recent collaborations and advancements may be influential factors. Still, as with any investment, it’s crucial to do your research and make an informed choice based on your personal risk tolerance and investment goals.