
In a recently illuminated exchange on X, David Schwartz, Ripple’s Chief Technology Officer, who also operates under the pseudonym JoelKatz, fielded queries regarding the eerily parallel price trends seen with XRP and Stellar (XLM). These interactions shed light on the intricate dynamics of the crypto market involving two of the major cryptocurrencies and the intricate variables that can influence their valuation.
Schwartz tactfully responded to a post by Good Morning Crypto, which outlined a persistent price graph comparison between XRP and XLM since 2014. The intriguing, comparable price patterns sparked questions and led to speculation if both cryptocurrencies could achieve meteoric highs during the ongoing bull run. Schwartz responded candidly, “I genuinely don’t know. The thing that I think is most likely is that both prices are driven primarily by factors completely outside their ecosystems.”
The Ripple CTO also addressed evidence that might contradict his theory. Probed about the distinctive correlation, he cited the instance when Stellar notably burned half of their token supply. Interestingly, this event did not cause a fluctuation in their market value, nor did it disrupt the price symmetry with XRP. He stated, “The one bit that’s the most convincing to me is that Stellar burned half their supply and there wasn’t a disruption in their price chart or any real deviation from XRP’s price correlation.”
Indeed, this engagement emphasizes a more considerable theme within the cryptocurrency sphere. Both XRP and XLM share a common founder, Jed McCaleb, and parallel technical frameworks aimed at expediting cross-border transactions. Nonetheless, the lack of price influence following Stellar’s token burn has piqued curiosity among crypto analysts and enthusiasts.
Historically, XRP and XLM have dramatically mirrored each other’s price movements, perchance credited to similar use cases, collective investor behavior, and shared market perceptions. As financial instruments enabling swift, cross-border operations with minimum fees, they’ve managed to magnetize a common pool of investors seeking alternatives to conventional banking limitations.
Market sentiment, too, plays an impactful role. Perturbations in one cryptocurrency can rapidly reverberate to the other due to their perceived substitutability; moreover, regulatory transformations in one can inadvertently steer investor sentiment for the other.
Intriguingly weighing in on this, popular pro-XRP advocate Bill Morgan said, “I don’t know what causes it, but it exposes how frivolous Ripple burning the escrow would be. Despite stellar burning XLM and Ripple abstaining from burning XRP, there was no impact on the symmetry. Similarly, lawsuits have had no overall impact… “
There are ongoing speculations as to whether both XRP and XLM will concurrently score significant gains in the anticipated bullish market. Despite historical data suggesting a high correlation, Schwartz reiterated that external influences like global market conditions and macroeconomic factors could be the drivers in these fluctuations.
As of the release of this report, the XRP price stands steady at $0.5282.