In an exchange on This discussion has highlighted not only the intertwined market dynamics of these two major cryptocurrencies, but also the complex factors that influence their valuation.
Curious correlation between XRP and XLM
Schwartz spoke candidly to a message from Good Morning Crypto, which marked a long-term price chart comparison between XRP and XLM since 2014, questioning the ‘unnatural price symmetry’ and the potential for both to ‘break out together during this bull run’. Schwartz replied,,I really do not know. What I think is most likely is that both prices are determined primarily by factors completely outside their ecosystems.”
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However, Schwartz also acknowledged conflicting evidence for his theory. When asked for details about the unusual correlation, he pointed out the significant event where Stellar burned half of their token supply, which surprisingly did not impact their price or disrupt the price correlation pattern with XRP. “The one thing that’s most compelling to me is that Stellar burned through half of their supply and there wasn’t even a glitch in their price chart or any real deviation from XRP’s price correlation,” Schwartz explained.
This dialogue underlines a broader story within the cryptocurrency sector, where XRP and XLM share not only a founding father in Jed McCaleb, but also similar technological frameworks aimed at streamlining cross-border payments. Despite these overlaps, the absence of a price impact following Stellar’s token burn has been a particularly confusing aspect for analysts and the crypto community alike.
Both XRP and XLM have historically mirrored each other’s price movements, possibly due to overlapping use cases, investor behavior and market perceptions. As financial instruments that enable fast, cross-border transactions at minimal costs, both have attracted similar investors looking for alternatives to traditional banking hurdles.
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Market sentiment plays an important role. News affecting one of the cryptos can quickly spill over to the others due to their perceived fungibility. Additionally, regulatory shifts in one sector can inadvertently impact investor sentiment toward another.
Popular pro-XRP advocate Bill Morgan commented about this: “I don’t know what the cause is, but it shows how useless Ripple burning the deposit would be. Stellar burned XLM and Ripple did not burn XRP and it did not affect the symmetry. The same goes for the lawsuit. No impact overall. Stellar was not charged. Factors external to the blockchain and not specific to Ripple or Stellar must be the explanation.”
The ongoing debate includes speculation about whether XRP and XLM will collectively post significant gains in an expected bull run. Historical price patterns indicate a high level of correlation, but as Schwartz points out, external factors such as global market conditions and macroeconomic factors likely play a role.
At the time of writing, the XRP price was $0.5282.
Featured image created with DALL·E, chart from TradingView.com