Ripple and Stellar Decline on Monday as Competition Intensifies
Ripple XRP and Stellar Lumens declined on Monday, as the crypto market’s weekend rally failed to have a lasting impact ahead of U.S. Tax Day.
From a purely price perspective, XRP and Lumens don’t have much in common. However, the future of cross-border payments will likely flow through one or both of these virtual currencies.
XRP moved back above $0.50 over the weekend, but momentum was sorely lacking as prices failed to extend beyond $0.51. The combination of higher volatility and declining trade volumes pushed XRP back down toward $0.4750 on Monday. Current values give Ripple has market cap of $19.1 billion.
At the time of writing, Ripple XRP was trading at $0.4840, where it was down 3% from the previous day. Trade volumes rose to $266.4 million from a low of around $250 million on Friday. More than one-third of XRP trades were quoted in South Korean won.
Stellar’s Lumens were dragged lower on Monday by the general downtrend in the crypto markets. The coin bottomed at $0.1932 on volumes of $32.2 million. XLM has recovered to just below $0.20, having declined nearly 5% from the previous close.
XLM is quoted against the dollar for convenience only given that the currency is mainly traded against other crypto assets. At the time of writing, Stellar traded at 0.000029 BTC and 000494 ETH.
XLM is capitalized at $3.7 billion, putting it in the no. 8 spot on the list of active cryptocurrencies.
The Battle for Cross-Border Supremacy
Ripple and XRP are the cream of the crop of digital assets that promise to streamline cross-border payments. Where they differ is in execution.
Whereas Ripple has become known as the banker’s cryptocurrency for its easy interplay with traditional finance, Stellar aims to go around the institutions and straight to the consumer. In terms of fiat-based cross-border transactions, Lumens essentially serves as a bridge between, say, the euro and U.S. dollar. (This also requires a steady supply of XLM in circulation for liquidity purposes).
Stellar is also looking to leverage advances in Lightning Network technology to improve long-term scalability and security. Stellar’s Lightning testnet launched at the beginning of April, with a beta version expected for October.
Ripple’s XRP protocol also enables it to be a bridge payment for international finance. While the company has announced dozens of high-stakes partnerships, including a Japanese consortium that represents 80% of the country’s banking assets, XRP uptake has been limited.
That said, Ripple’s business model has plenty of upside for the company itself, which could lead to a boost in XRP adoption over the long haul. In terms of payment corridors, the company isn’t targeting transactions like Euro-USD because they are already efficient. Rather, it plans to go after corridors like Euro-INR (Indian Rupee).
At the moment, Ripple has the clear advantage in terms of price point, market cap and industry partnerships. However, Lumens isn’t far behind. For crypto purists, it has the added advantage of being decentralized and a potential launchpad for ICOs.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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