How to buy Stellar Lumens (XLM) cryptocurrency?

In 2014, the Stellar Development Foundation created the Stellar network, which also has its own digital currency, called Lumen (XML).

Stellar is managed by the Stellar Development Foundation, a non-profit organization established by Jed McCaleb. Initially, the Stellar project was funded by Stripe and donations from FastForward, Google and BlackRock. The organization accepts tax-deductible public donations to cover its operational expenses.

The platform's native currency at the time was "stellars." Stellar changed its name to Lumens later, but many people still remember the original name. So you may still hear the term stellars. Stellar and Lumens might be used interchangeably but Stellar is the platform. The platform uses Lumens (or XLM) as the crypto asset.

The protocol converts money sent via Stellar to Lumens, and then to the desired currency. Stellar can convert money sent in dollars to recipients in Mexico to Lumens. The recipient can then receive the payment as pesos. The entire process takes just seconds and allows you to send or receive money anywhere in the world.

In 2018, Stellar has signed a deal with TransferTo for cross-border payments with more than 70 countries. It was also the first distributed technology leader to obtain a Shariah compliance certificate for payments, asset tokenization, and was chosen by IBM (IBM), as a partner for a double-pegged stabilisation project.

Trades on the Stellar network use Lumens. Stellar’s blockchain is a network that links banks, payment systems, and people to facilitate cross-asset, low-cost value transfers, including payments. Lumens (XML) can be used to pay Stellar transaction fees. Lumens can also act as an intermediate currency that facilitated faster traders on the network.

In many ways, the Stellar network is similar to Ripple. Both use the same blockchain code and neither allow mining. They both use a distributed ledger, and provide almost instantaneous transactions.

These similarities can be attributed mainly to McCaleb's knowledge of Ripple's success and shared that knowledge to create Stellar.

Currently, there are approximately 24.3 billion of Stellar's cryptocurrency XML coins in circulation. The maximum supply is 50 billion XML. The original Stellar Foundation had more than 100 billion lumens but decided to burn half of it. The move caused a temporary rise in the price for XLM but quickly faded. Coin burns are controversial as they indicate the type of manipulation that decentralized systems are meant to prevent.

Stellar remains one of the most successful altcoins.

As crypto exchanges have become more accessible and the XLMUSD price has risen, more people have begun to invest in cryptocurrency. Stellar trading is allowing a great transfer of wealth and even new investors can hope to profit from its fast growth and earn higher returns than they would on the stock market.  

With so much attention from the media and financial traders, new cryptocurrency investors are always looking for advantageous ways (platforms) to buy Stellar (XLM) online. Luckily, there are numerous services and guides on how to buy Stellar to help you get started in the cryptocurrency market. 

Such multi-asset platforms hand investors many useful financial instruments that can generate a passive income (interest with forex trading or dividend with stock trading). 

Buying Stellar (XLM) over an exchange 

If you want to participate in a crypto project development and own the digital asset, you can buy Stellar (XLM) online through a cryptocurrency exchange, such as Binance, Kraken, Bittrex, or Coinbase, and store it in a digital wallet.  

Having an account on a cryptocurrency exchange allows you to send and receive Stellar (XLM). Transferring Stellar is like the way traditional bank transfers work, except for the bank account address, which is replaced with a Stellar address. Because digital currency is transmitted directly between individuals without needing third-party entities, such as banks, transaction fees are cheaper than those charged by traditional institutions. 

If you want to hold your crypto for a longer time, it is advised to transfer them from the crypto exchange to a secure cryptocurrency wallet. Wallets are much safer, and each private crypto wallet has a private key. It is critical to keep your private key safe because you won't be able to access your crypto without it, and if it's easily available, your funds could be stolen. 

The good news is that investors can limit the risks presented by the crypto exchange by trading Stellar (XLM) with contracts for difference (CFDs). Stellar (XLM) CFDs allow you to speculate on the price of the cryptocurrency without having to own the digital asset.

Read on if you want to learn to trade Stellar with capex.com in the most convenient way. 

Buying Stellar (XLM) with an Online Broker 

Trading Stellar (XLM) with an online broker like CAPEX means that instead of owning Stellar outright, you’ll be speculating on its price with CFDs.  

The main difference between buying Stellar (XLM) from an exchange and buying Stellar (XLM) from an online broker is that you don’t own Stellar (XLM) when you use a broker. Owning crypto requires investors to have a crypto wallet, either within the exchange or a private wallet. But when you purchase Stellar (XLM) CFDs using an online broker, the CFDs are stored in your account and are far more liquid, which makes trading CFDs more popular. Unlike cryptocurrency exchanges, online CFDs brokers are regulated by financial authorities.   

The Alternative Way to Invest in Stellar (XLM)  

Trading CFDs is a process of buying or selling CFDs and can generate a profit if the value of the asset moves in the direction of the investor’s prediction, or a loss if the market goes against him. 

You can buy Stellar CFDs (go long) if you believe the value of the digital asset will increase.  

At the same time, you can “go short” if you believe that the price of the underlying asset, in this case, Stellar (XLM), will decrease, by selling CFDs. 

Trading CFDs provides leverage, and you can open your position by depositing only a margin.  

For example, if a trader wants to buy 100 Stellar CFD at $36 would only require $1800 of trading capital. 

It’s important to remember that leverage can increase both your profits and your losses, and they will be based on the full exposure of the trade, not just the margin requirement needed to open it. Potential losses, as well as profits, could exceed your margin. 

Concisely, if you choose to trade crypto CFDs, you can profit from the difference between the buying and the selling position.  

With CAPEX, you can trade CFDs on futures or spot prices. Trading CFDs on futures gives you exposure to the futures market, but without requiring you to take on any obligations or worry about any of the other nuances that are associated with futures trading. 

Buy Stellar XLM CFDs - Go Long

Instead of taking ownership of Stellar, you can place a ‘long position’ translates to buying Stellar CFDs. Your position, or Stellar CFDs, will increase in value according to the increase in the price of the digital asset Stellar’s price increases. If the price of Stellar falls, then your position will lose value and can lead to loss. 

Let’s assume that Stellar is trading at a sell/buy price of 0.3600/0.3680 USD. You want to buy 5000 CFD (units) because you think the price of Stellar will go up. Stellar has a 1:2 leverage or a margin rate of 50%, which means that you must deposit only 50% of the position’s value as position margin. 

In this example, your CFD position margin will be $920 (50% x (5000 units x $0.3680 buy price)). Losses greater than the margin can occur if the price of Stellar moves against your position. 

Outcome A: a profitable trade 

If your prediction was correct, and the price of Stellar surges over the next hours or days, then you have made a profitable trade. If the sell/buy price is 0.4020/0.4100 USD when you decide to close your position by selling at 0.4020 (the new sell price), then your profit will be $170. 

The price has moved $0.034 (0.4020 - 0.3680) in your favor. Multiply this by the size of your position (5000 units) to calculate your gross profit which is $170. 

If the position was closed during the day, there will not be any swap charges and the net profit is $170. 

Outcome B: a losing trade

If your prediction for the price of Stellar was wrong, the Stellar CFD trade will result in a loss. Let’s assume that the price of Stellar drops over the next hour to a sell/buy price of $37.30/37.60. Because you want to limit the loss in the eventuality that the price continues to drop, you can sell at $37.30 (the new sell price) to close the position. 

The price has moved $1 (37.30-36.30) against you. Multiply this by the size of your position (1000 units) to calculate your loss, which is $1,000. 

Sell Stellar XLM CFDs - Go Short

In this CFD example, Stellar is trading at a sell/buy price of 0.3520/0.3600 USD. Assume you want to sell 5000 CFDs (units) because you think the price will go down. Stellar has a 1:2 leverage or a margin rate of 50%, which means that you only must deposit 50% of the position’s value as position margin. 

In this example, your CFD position margin will be $880 (50% x (5000 units x 0.3520 sell price)). Remember that if the price moves against you, it is possible to lose more than your initial position margin of $880. 

If you are not ready to trade CFDs at spot or futures prices yet, we have also got educational resources like CAPEX Academy with free courses on how to trade. Plus, we offer a demo account – giving you $50,000 in virtual funds to build your confidence in a risk-free environment. 

Investing in Stellar without actually buying Stellar  

While buying and day trading cryptocurrency is a major trend right now, it is important to remember that cryptocurrencies are a volatile and risky investment choice. If investing in crypto on an exchange or via a broker does not feel like the right choice for you, here are a few options to indirectly invest in Stellar and other cryptocurrencies: 

Exchange-Traded Funds - Crypto ETFs 

Exchange-traded funds (ETFs) are popular investment tools that allow investors to buy exposure to hundreds of individual investments in bulk. That is why ETFs are a means of diversification for your portfolio and as less risky than investing in individual investments.  

A crypto ETF allows investors to trade cryptocurrency on a traditional market and eliminates the need to trade the asset on a crypto exchange. Another advantage of trading crypto ETFs is that investors do not have to worry about the security aspects of trading crypto.  

US investors can enter the crypto market by using ProShares Bitcoin Strategy ETF (BITO). The Fund provides capital appreciation through managed exposure to bitcoin futures contracts. 

A Stellar ETF could come in 2022. The approval of a Bitcoin ETF means a similar offering for Stellar is imminent.  

>> Learn what is an ETF and how does it work 

Companies Connected to Stellar and Cryptocurrency - Stellar Stocks

Another option is to invest in cryptocurrency indirectly by investing and buying shares of companies that offer real-life products and services but still use or own cryptocurrencies as part of their business model (known as Stellar stocks). With an all-in-one trading account with CAPEX, you can also trade shares CFD of public companies like:  

• PayPal (PYPL). This is a worldwide payment service that allows their customers to buy and sell crypto using their PayPal and Venmo account. Learn how to buy PayPal shares
• VMWare (VMW). VMware Blockchain is the digital foundation that helps you run business-critical, multi-party applications. Learn how to buy VMWare shares
• Coinbase (COIN). Coinbase is a cryptocurrency exchange that allows consumers, financial institutions, and businesses to transact between fiat and cryptocurrencies and securely store and use cryptocurrencies. Learn how to buy Coinbase shares
• Goldman Sachs (GS). This leading global investment banking, securities and investment management firm listing includes Coin Metrics, a provider of blockchain data to institutional clients. Learn how to buy Goldman Sachs shares
• CME Group (CME). CME is a financial derivatives exchange that offers trades in cryptocurrencies as well. In Q3 2021, the company reported a 14% year-over-year increase in its average daily volume (ADV) at 17.8 million contracts. Learn how to buy CME shares

CAPEX Web Trader 

Trade on one of the most complete, fully customizable trading platforms on the market. 
 
Available on desktop (Windows, Mac) and mobile (Android, iOS), it provides intuitive, web-based access to a vast range of tradable instruments, charting tools, analytical tools, and many more features. 

To view Stellar's real-time price and chart on the trading platform can click on the "Search" icon located in the left panel or by clicking on "Cryptocurrency" and then select the instrument, in this case, Stellar (XLM). 

>> Launch Web Trader 

MetaTrader 5 

MetaTrader 5, one of the best crypto trading apps, is providing superior tools for comprehensive price analysis, use of algorithmic trading applications (trading robots, Expert Advisor), and copy trading. 

MetaTrader 5 is available on both desktop and mobile.  

>> Download MT5 

Step 3: Pick up a Stellar trading strategy 

Additionally, you can pre-define Stop Loss and Take profit orders, which are crucial risk management tools – that help you minimize the potential loss and maximize the potential gains. 

How to buy Stellar with Market Orders 

The simplest type of trade order is a market order. Market orders are usually placed by traders if they want to be certain trade is executed. A market order is instant. Therefore, it is simply an order placed by a trader to buy or sell Stellar immediately at whatever its current price is.  

I want to buy 200 Stellar (XLM) right now or as quickly as possible. 

How to buy Stellar with Limit Orders 

While a market order is simply an order placed by traders to buy or sell an asset immediately at whatever the current price, a limit order in its most basic sense, is an order to buy or sell an asset at a specific price. Buy limit orders are placed above key support levels with the purpose of limiting price risks anticipating the uptrend will resume after a correction (buy the dip).  

The price for XLM/USD is currently at USD 0.3600 and you place a buy limit order at USD 0.3600, then your order is meant to execute at the price of USD 0.3500 as soon as there is a matching sell order at this price or better. 

How to buy Stellar with Stop Orders 

A stop order is an order that becomes a market order only once a specified price is reached. It can be used to enter a new position or to exit an existing one. Limit orders are placed above key resistance levels anticipating a breakout after a consolidation. 

The price for XLM/USD is currently at USD 0.3600 and you place a buy stop order at USD 0.3700, then your order is meant to become market at the price of USD 0.3600 as soon as the price is reached. 

Step 5: Monitor and close your Stellar position 

To open a Stellar trade, you’d buy if you thought that the price was going to rise or sell if you thought the price was going to fall. Once your trade is open, you’ll need to monitor the market to make sure that it’s moving in the way you anticipated. 

The technical indicators available on our trading platform can help you to determine what Stellar’s price might do next. Indicators can also help you monitor current market conditions like volatility levels or market sentiment. 

CAPEX WebTrader can deliver an in-depth analysis of the charts and offers over 90 indicators (including moving average, MACD, RSI, and Bollinger Bands). The WebTrader platform also supports an interactive trading activity with high-end research tools helping you interpret market data.  

Take Profit & Stop Loss

Traders can close a position immediately to take a profit or to cut a loss. You can use market order or set Stop Loss and Take Profit levels when you set the order to buy Stellar.  

The platform offers the stop-loss option, which lets you clearly state how much you're willing to risk with your trade. Similarly, the take profit is the exact opposite. It tells your broker how much you expect to make as a profit and when you want to close your position. 

Any profits you make will be paid directly into your trading account. Losses are deducted from your account balance. 

When to buy Stellar (XLMUSD)

Investors should be aware of the fundamental and technical analysis when deciding when to buy Stellar. The fundamental analysis considers the news and events about the coins, exchanges, and other crypto businesses. The technical analysis uses the price value history to map the evolution of the supply and demand for Stellar. 

Stellar Price Prediction using Fundamentals 

When using the fundamental analysis approach, investors should be aware of the government regulation, latest cryptocurrency updates, and technical issues, as well as cryptocurrency exchanges that affect the supply and demand for cryptocurrencies.  

For instance, when Bitcoin CME was introduced into the government regulations, and it drove the price of Bitcoin to almost $20,000 in December 2017. 

What is the future of Stellar? 

Cross-border payments may take up to seven days to settle using today's infrastructure. However, Stellar allows fiat currency to be converted into Lumens (XLM), the native token of the network, and transferred halfway around the globe. Then, it can be converted back to its native currency in just seconds. How much does it cost to complete the transaction? Only 0.00001 XLM. This works out to $0.0000038 for each transaction. Performing more than 263,000 transactions on the Stellar network will cost only $1 in fees.

Stellar has had some real-world experience, in addition to fast execution. It collaborated with IBM in 2017 to test its cross-border payment platform with 12 banks in the South Pacific region. It is also part of a collaboration with Visa, and Tala to bring financial Blockchain solutions to emerging markets that lack access to basic financial services.

Stellar Development Foundation (SDF), has partnered with many of the largest companies in finance and technology, such as Deloitte and IBM, Stripe, and a dozen financial institutions as well as payment processors in Asia, Europe, and Asia. The global network is decentralized and scalable, allowing financial institutions to issue assets and settle payments.

The Stellar Protocol 18 was successfully deployed in November 2021. This allows developers to create automated market-makers (AMMs), on Stellar. AMMs are decentralized exchanges that help increase the network’s liquidity.

Bloomberg reported that Stellar approached US-based global payment remittance company Moneygram International to discuss a possible takeover in partnership. On 6 October, the companies revealed a partnership that would integrate MoneyGram's network and the Stellar blockchain to facilitate payments using Circle’s USD stable coin USDC. Customers will be able to use USDC to fund cash and pay in local currencies. MoneyGram will be able to process transactions in near real-time, increasing efficiency and reducing risk.

On September 29th, VersaBank, a digital bank company, and Stablecorp, a Canadian blockchain fintech company, launched VCAD, a Canadian stablecoin on the Stellar network.

The Stellar Development Foundation reported on 25 October that Flutterwave, a global payments technology company, had collaborated with TEMPO digital money transfer business to launch two new remittance channels using Stellar USDC between Africa and Europe.

TEMPO announced in October 2021 that it had partnered with Arf, a payment network, to launch a new payments route from Europe to the Philippines via Stellar.

Grayscale Investments, a digital currency asset manager, announced that on 18 October, its Grayscale Stellar Lumens Trust had begun trading on OTCQX Best Market under the symbol GXLM, due to growing investor interest. GXLM is available for accredited investors via private placement since December 2018.

The Stellar Foundation has announced a new investment path within its Enterprise Fund. This track will allow it to invest in projects that increase the use of blockchain.

The Enterprise Fund has invested $24.5 million in fintech and Blockchain companies in America, Latin America, and Africa since the beginning of 2021. The Matching Fund will match up to $500,000 for early-stage companies (pre Series B financing) who are developing applications and services on Stellar. The Enterprise Fund will be focusing on investments in later-stage (Series A) companies that are not yet IPO-ready.

Digital financial services company Tala announced on 14 October that it had raised $145m through Series E financing. This financing was led by Upstart and included participation from the Stellar Development Foundation. The total funding now stands at $350m. This investment will allow the company to accelerate its rollout of new financial account tools as well as develop a mass-market cryptocurrency product suitable for emerging markets.

Since 28 September, the XLM price started to rise. It reached $0.2553, its lowest point since 27 July. Following the MoneyGram announcement, the price rose to $0.36 and reached $0.4198 on October 16. This is its highest level since June 6, when it was hit by a surge in cryptocurrency markets.

Because is difficult to analyze the intrinsic value of a cryptocurrency, it is recommended you perform a technical analysis before investing in Stellar CFDs. It might offer some insight into the past movements of Stellar, helping you predict where it will head in the future. 

Stellar price prediction using technical analysis 

Some believe the high concentration of retail traders makes cryptos truer to traditional chart patterns and indications of oversold, overbought conditions, etc. 

Technical analysis techniques can be applied to any market where the price can freely fluctuate, and data is available to see those fluctuations. The CAPEX Web Trader has a full suite of all the best-known technical indicators and chart drawing tools. 

>> Learn how to forecast Stellar price with technical analysis 

Stellar Forecast 2022  

Top analysts are not optimistic about Stellar Lumens (XLM) strong bullish movement, at least not for the next decade. TradingBeasts predicted that XLM would rise in 2020 and that Stellar's average price would be $0.11. It was also predicted that Stellar would see significant consolidation over the next years, and would be at the very least, $0.19 by 2023. Although the price did rise to $0.20 in 2020, it has now risen to new heights.

Stellar Lumens (XLM) has experienced an incredible year of growth. It also saw temporary corrections, but it created a bullish structure in relatively short time frames.

Stellar Lumens (XLM), reached its highest price since 2018. It gained more than 500% in just a few short months. Although the currency has shown steady growth, it is not possible to maintain price momentum forever. Since the May major high, the dollar's value has fallen sharply with a correction below $0.40.

Stellar Lumens trades at $0.1970 - $0.3268. While this may seem low in comparison to the yearly range, it is still a very high price compared to previous years.

The price should remain stable and trade in the $0.40- $0.20 range, just like it did in 2018. This may hold true for the end of 2021 and the net year, 2022.

Some believe Stellar Lumens may see their price stabilize for the majority of the remaining year in order to clear the dust from all the price activity of 2021, but there is still optimism in the Stellar Lumens market (XLM), particularly for 2022. Stellar Lumens' potential partnerships with top finance companies like Visa, Flutterwave, and Tangem have drawn attention to economic forecasts. It is expected that prices will reach new highs in 2022.

It is worth noting that the 2021 price range was $0.128517- $0.797800. This is significant because it currently trades at $0.32, by the end of November 2021. Stellar Lumens could see significant buying power in 2022 if the price consolidates in the region. This would allow Stellar Lumens to surpass 2021's high, and possibly reach a new all-time high.

The XLMUSD price chart shows a clear uptrend (see trendline and moving average) and a positive Stellar 2022 forecast with the highest potential target at $0.65. Stellar price should retest the previous high and complete an ascending triangle, a bullish chart pattern that indicates price could rise after a breakout with the height of the triangle (0.22-0.23 in this case).

In conclusion, should you Buy Stellar or not? 

As with any investment, make sure you carefully assess your financial situation before investing in cryptocurrency, Stellar, and the stock market. Stellar can be extremely volatile—a single tweet can make its price plummet—as cryptocurrencies are still a highly speculative investment. Follow the already famous crypto investment phrase — "invest only what you can afford to lose".