XRP and Stellar (XLM) are often compared due to their roles in facilitating cross-border transactions and their similar price movements. Recently, Ripple’s CTO, David Schwartz, shared some interesting insights about the relationship between these two cryptocurrencies, adding more depth to the ongoing conversation.
What’s Driving the XRP Price?
In a recent post on X, Schwartz admitted that he has “no idea” what drives XRP’s price. This might seem surprising coming from one of the main architects of the XRP Ledger, but it highlights the various market factors that can influence XRP’s price. Schwartz pointed out a key observation:
“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 suggests that, despite the complexities, XRP and XLM often follow a closely connected path.
Shared Origins, Similar Patterns
XRP and XLM share a common history, as Stellar was founded by Jed McCaleb, who was also a co-founder of Ripple before starting Stellar. While both tokens are designed for cross-border payments, they focus on different markets and use cases. Schwartz’s observation implies that when market forces impact one token, they often affect the other as well. However, the exact reasons for this connection remain unclear, as Schwartz himself acknowledged the lack of clarity on what drives XRP’s price.
Earlier, Schwartz shared a chart showing a strong correlation in the price movements of XRP and XLM, and he suggested that similar market forces could be at play.
He mentioned that investors often group XRP and XLM together due to their shared history, leading many to buy and sell both tokens at the same time, which results in similar price patterns.
What Lies Ahead for XRP and XLM?
XRP and XLM have gained significant attention as top contenders in cross-border payments and are often seen as rivals in this space. While their prices tend to move in tandem, the exact nature of their connection is still a bit of a mystery. Understanding the link between these two digital assets could provide valuable insights into their future in the cryptocurrency market.
