The Ultimate Guide to
Trading Stellar
Stellar is a decentralized open source protocol used for sending and receiving funds between any pair of fiat currencies or supported cryptocurrencies. It was created by the non-profit Stellar Development Foundation led by Jed McCaleb. Stellar aims to connect payment systems, banks and people in a fast and reliable manner.
The Stellar platform has its source code hosted on GitHub. Users can hold balances on the platform by using a gateway allowing a trustworthy network participant to accept deposits in exchange for credit on the Stellar network.
Stellar has a native digital currency that was originally called the stellar, but is now known as the lumen or XLM. Moreover, the cryptocurrency’s value is determined by market forces of supply and demand, with the supply of lumens increasing by a rate of 1 percent per year.
The Stellar network was initialized on July 31st of 2014 with 100 billion stellars (now lumens). Stellar has its own distributed ledger that gets maintained through a consensus algorithm, as opposed to by mining.
As rule of thumb, buying and selling lumens is typically more secure when using a regulated online broker.
How to not get scammed when trading XLM – Stellar
When trading online it’s good to be aware of any possible scams. Be cautious of dubious behaviours such as companies that requiring an initial fee to exchange XLM for cash. Promises of investment schemes that guarantee to quickly multiply the value of an investment should also be approached with caution.
Phishing is another popular fraudulent activity found on both social media and through emails. This involves someone impersonating a business brand to obtain passwords and other personal information, including ways to access cryptocurrency wallets. While these approaches can seem quite obvious to some people, it is generally best to avoid participating in financial arrangements using direct messages to reduce the risks of phishing.
Hacking is also a legitimate threat to cryptocurrencies. Large cryptocurrency exchanges can be hacked. For example, Mt. Gox experienced a loss of 850,000 bitcoins in 2014 due to a hack eventually leading it to its demise.
If possible, the best option for trading XLM will generally be a regulated broker. For example, AvaTrade is part of a firm with a market capitalisation around $17 billion. AvaTrade is registered and regulated in Ireland where strict EU regulations apply. Similarly, the popular regulated broker is eToro also established in Europe, must operate under the Markets in Financial Instruments Directive and subsequent revision.
Moreover, by choosing among the many regulated brokers that support cryptocurrency trading , XLM users may gain greater peace of mind about the safety of their investment.
Trading XLM – Stellar through AvaTrade
There are various regulated online brokers, such as AvaTrade that offer a user friendly interface for trading XLM called MetaTrader 4 (MT4). MT4 was developed by MetaQuotes and is freely available from its website. This popular trading platform should suit traders of any experience level and comes in versions that are compatible with desktops, web browsers, tablets and smartphones.
MT4 also has advanced charting options that facilitate traders’ ability to analyse current market trends. It also has a customisable interface, where styles and colours can be adjusted to taste.
Trading XLM through AvaTrade requires a simple sign up process. Once an account is opened, thousands of additional assets can be traded, although please note that risks exist with just about all forms of trading.
Key Influences on XLM – Stellar
Stellar’s lumen is a dynamic cryptocurrency with many factors influencing its value. Since XLM is not pegged to any fiat currency, its market value varies mainly due to supply and demand factors.
For example, any hint of government regulation that might inhibit the use of XLM will tend to reduce its value, while situations like the Cyprus banking crisis in 2013 can raise demand for the coin as individuals look for ways to store their wealth outside their government’s jurisdiction. Furthermore, when large companies start to allow payments to be made in lumens, this will most likely tend to boost the coin’s price. On the other hand, news of a major exchange hacks like that of the Mt Gox disaster can depress it.
XLM – Stellar Quick facts:
Source: CoinMarketCap.
- When Stellar (XLM) started: July 31st, 2014
- Daily volume of XLM exchanged (July 12th, 2019): $533,952,424.
- High closing price in U.S. dollars: $0.938144 on January 4th, 2018.
- Market Capitalisation (July 12th, 2019): $1,887,178,996.
- Estimated Circulating Supply: 19,425,874,942 XLM.
- Total Supply: 105,142,706,350 XLM.
- Top online social trading broker to provide access to XLM: eToro.
Want to trade other cryptocurrencies?
Those looking to trade other digital currencies can read more cryptocurrency broker comparisons at the links below:
