The post Are XRP And XLM Correlated? Ripple CTO Shares Insights appeared first on Coinpedia Fintech News
XRP and Stellar (XLM) are two cryptocurrencies that have been constantly compared in terms of price growth and development. Both digital assets are committed to facilitating cross-border transactions. In continuance to a discussion revolving around XRP that initiated in March, the Ripple CTO, David Schwartz has shared some interesting insights into the correlation between XRP and Stellar (XLM).
Insights From Schwartz’s
In an X post, Schwartz openly acknowledged that he had no idea what were the factors that drive XRP’s price. It might be surprising to see that such a statement is made by one of the key architects of XRP Ledger, but regardless, it is worth noting that this might highlight various market factors that might be influencing the XRP price action.
He further went on to notice a crucial point stating-
“The only real objective data point I have is that XRP tracks the price and market cap of XLM incredibly well over all time frames.”
This observation might imply that despite the complexities influencing the price action, XRP and XLM share a closely connected path.
Exploring Their Origins And Price Influence
XRP and XLM share identical origins, as XLM was created by Jed McCaleb, a co-founder of Ripple who later split to start Stellar. Both the tokens are intended to facilitate cross-border payments, although they cater to different markets and use cases.
The correlation emphasized by Schwartz could mean that market forces affecting one of these tokens often influence the other. However, the exact reasons for this correlation remain speculative, as Schwartz himself has cited the lack of clarity on the precise drivers behind XRP’s price.
CTO’s Previous Hints To The Correlation
Schwartz had previously also shared a chart displaying a strong correlation in the price movements and patterns between XRP and XLM tokens and had explained the distinct reasons behind XRP and XLM’s unique price movements.
The Ripple CTO had admitted even back then that he lacked an accurate explanation for the price correlations, however, he provided two major factors that could be influencing the price trends.
The Two Factors That Could Be At Play
Schwartz revealed that comparable market forces that regulate various cryptocurrencies also control XRP and XLM. He stated that most investors and crypto enthusiasts often place XRP and XLM within the same category due to the cryptocurrencies’ historical connection. Therefore a significant number of people simultaneously engage in buying and selling XRP and XLM causing the cryptocurrencies to have similar price movements
XRP and XLM have gained significant attention, and often viewed as the leading contenders for cross-border payments and mainstream adoption. While they tend to display similar price tracks, there still needs to be some clarity on the correlation between the two.
