Is Stellar Lumens (XLM) the next big cryptocurrency?

You may know bitcoin, ethereum, and XRP, but are you familiar with Stellar Lumens (XLM)?

a woman

You鈥檙e reading a free article with opinions that may differ from The Motley Fool鈥檚 Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Many readers will be very familiar with bitcoin by now and probably even ethereum and Ripple's XRP, but one increasingly popular cryptocurrency that might have escaped them is Stellar Lumens (XLM).

Stellar, the company behind Stellar Lumens, has created a distributed, hybrid blockchain that is fully open-source.

The infrastructure was launched in 2014 to facilitate cross-asset transfers of value, including payments.

Essentially, the technology can move money across the globe quickly, reliably, and for just fractions of a cent using its crypto-asset called Lumens, or XLM, as a bridge.

Whilst bitcoin can accomplish the same thing, its archaic technology means that it takes considerable time for a transaction to complete. If this doesn't improve in the future, then it isn't hard to see why users would favour XLM or XRP instead.

Cryptocurrency traders certainly appear to be betting big on XLM in the future. The XLM price has risen by a massive 30% in the last 24 hours to reach 61.9 U.S. cents.

This gives the alt-coin a market capitalisation of over US$11 billion, roughly equal to that of insurance giant QBE Insurance Group Ltd (ASX: QBE).

Whilst this makes it one of the larger cryptocurrencies out there, it still pales in comparison to bitcoin, ethereum, and XRP.

These three have market capitalisations of approximately US$231 billion, US$117 billion, and US$81 billion, respectively, at the time of writing.

Should you buy Stellar Lumens?

I have been impressed with the technology behind XLM and believe it is vastly superior to that of bitcoin.

However, I feel it is near impossible at this stage to place a value on it. As a result, traders may be better off watching on with a keen interest rather than putting any hard earned money into it.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on 鈴革笍 Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
鈴革笍 Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
鈴革笍 Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more

asx investor daydreaming about US shares
鈴革笍 How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more

鈴革笍 Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more