A recent community discussion XRP coin and noted very similar price movements of Stellar (XLM). Ripple CTO David Schwartz offered his perspective on this anomaly. Schwartz, who played a key role in engineering the XRP Ledger, suggested that the parallel price behavior of XRP and XLM could be influenced by external factors outside their respective ecosystems. Highlighting the complexity of the issue, he acknowledged that there was evidence both for and against this theory.
Schwartz cited the impact of Stellar’s significant token burn last year as a key point. Despite the reduction of half of the entire supply, this event did not cause a noticeable deviation in Stellar’s price or its correlation with XRP.
This led Schwartz to believe that a similar burning of XRP would not have a positive impact on the XRP price. Once again, he referred to charts comparing the price behavior of XRP and XLM before and after the burn, which showed no significant change.
What Could Be Behind This Anomaly?
Despite similar price behavior, XRP coin and XLM have different tokenomic properties. XRP has a total supply of 99.98 billion tokens, circulation of 55.43 billion tokens, a price of $0.525, and a market cap of $29.1 billion. In comparison, XLM has a total supply of 50.001 billion tokens, 28.976 billion tokens in circulation, a price of $0.1083, and a market cap of $3.14 billion.
XRP and XLM The price correlation between them can be attributed to their intertwined history and market dynamics. Created by Ripple co-founder Jed McCaleb as a decentralized alternative, the Stellar ecosystem generally follows the movements of XRP. Investors tend to look for opportunities in similar assets. This leads to an influx of capital into the market and equalizes the price dynamics of these two cryptocurrencies.
