Ripple CTO Addresses Curious Price Link Between XRP And XLM
In an exchange on X, Ripples Chief Technology Officer (CTO), David Schwartz, also known as JoelKatz, responded to queries about the strikingly similar price movements of XRP and Stellar (XLM). This discussion has brought to light not just the intertwined market dynamics of these two major cryptocurrencies but also the complex factors influencing their valuation.
Curious Correlation Between XRP And XLM
Schwartz candidly addressed a post by Good Morning Crypto, who highlighted a long-term price chart comparison between XRP and XLM since 2014, questioning the unnatural price symmetry and the potential for both to breakout together during this bull run. Schwartz replied, I genuinely dont know. The thing that I think is most likely is that both prices are driven primarily by factors completely outside their ecosystems.
However, Schwartz also acknowledged conflicting evidence to his theory. When pressed for specifics regarding the unusual correlation, he pointed to the significant event of Stellar burning half of their token supply, which surprisingly did not impact their price or disrupt the price correlation pattern with XRP. The one bit thats the most convincing to me is that Stellar burned half their supply and there wasnt so much as a blip on their price chart or any real deviation from XRPs price correlation, Schwartz explained.
This dialogue underscores a broader narrative within the cryptocurrency sector, where XRP and XLM share not only a founder in Jed McCaleb but also similar technological frameworks aimed at streamlining cross-border payments. Despite these overlaps, the absence of a price impact post-Stellars token burn has been a particularly puzzling aspect for analysts and the crypto community alike.
Both XRP and XLM have historically mirrored each others price movements, potentially due to overlapping use cases, investor behaviors, and market perceptions. As financial tools facilitating quick, cross-border transactions with minimal fees, both have attracted similar investor bases looking for alternatives to traditional banking hurdles.
Market sentiment plays a significant role. News impacting one of the cryptos can quickly spill over to the other due to their perceived substitutability. Additionally, regulatory shifts in one can inadvertently sway investor sentiment towards the other.
Popular pro-XRP lawyer Bill Morgan commented on this, I dont know what causes it but it shows how useless Ripple burning the escrow would be. Stellar burned XLM and Ripple did not burn XRP and it had no impact on the symmetry. Same for the lawsuit. No impact overall. Stellar was not sued. Factors external to either blockchain and not specific to either Ripple or Stellar must be the explanation.
The ongoing debate includes speculation about whether XRP and XLM will jointly make significant gains in an anticipated bull run. Historical price patterns suggest a high level of correlation, but as Schwartz indicates, external factors such as global market conditions and macroeconomic factors are likely at play.
At press time, XRP price stood at $0.5282.
Read more: https://www.newsbtc.com/xrp-news/ripple-cto-price-link-xrp-xlm/
Text source: NewsBTC
