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Q4 2019: Stellar gives away $16M, burns 50% of XLM — price still drops

Any other tricks left up Stellar's sleeve?

XLM is the native cryptocurrency of the Stellar network, a blockchain-powered solution pitched to make cross-border payments more efficient.

Stellar’s consensus architecture is relatively centralized when compared to Bitcoin. While this does allow it to process transactions with low fees and fast confirmation times, it does require users to place more trust in the validators on the network.

Regardless of this sacrifice, Stellar XLM is almost always listed in the top cryptocurrencies. XLM’s market cap is currently $1.19 billion, and ranked 14th  just behind Monero.

XLM/USD 2019 Q3 performance recap

As with the rest of the cryptocurrency market, Stellar had a pretty tough third quarter. A floundering Bitcoin led altcoins to suffer alongside it, and XLM was no different.

XLM opened the quarter at just over $0.10, and aside from two short periods between mid-July and mid-September, price action was pretty much entirely in the red.

Down, down, down, down, UP, down.

In fact, September’s 40-percent run from $0.058 to $0.083 marked the biggest opportunity for speculators throughout the whole quarter.

XLM/USD 2019 Q4 review

XLM opened fourth-quarter trade at just above $0.061, where it hovered for the first two weeks of October.

Volatility increased in XLM markets leading up to the second half of the month, when Bitcoin jumped from $7,500 to clear $9,600.

It took around a fortnight for XLM to follow, but eventually its price broke out to increase 31 percent between October 31 and November 5  from $0.064 to $0.084.

Might have caught that pump, if you’re lucky.

That week would represent the last time traders would find opportunities to make relatively simple gains. 

XLM bulls would retest those highs just once on November 11, before the markets began a slow decline that would last for the rest of the year. Stellar closed the fourth quarter of 2019 at $0.045.

Biggest news for XLM in Q4 2019

The plight of the Stellar Foundation to airdrop two billion XLM tokens to Keybase users ruled related headlines for the quarter, no doubt.

Indeed, the plan was abandoned after only three out of the originally planned twenty months worth of giveaways. What resulted was an airdrop of 300 million XLM shared in $10 batches, estimated to be worth around $16 million.

The Stellar Foundation eventually blamed the canceled airdrops on spammers who had flooded Keybase to collect as much free cryptocurrency as possible.

November also saw Stellar Foundation devs announce it would burn 55 billion XLM, representing over half of its supply.

This permanently decreased the total amount of XLM on the market by 50 percent immediately, and its positive effect on the markets was felt with a 14-percent push in the first week of November.

Looking ahead

We’re almost one month into 2020, and things have been relatively strong for XLM  likely the result of resilient Bitcoin trade.

So far, the price of XLM increased 33 percent from the start of the year, from $0.045 to just over $0.06.

So far, so good.

It might however prove difficult to keep this up, as the effects of the coronavirus outbreak (supposedly) threaten market sentiment moving forward.

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Published January 29, 2020 — 16:21 UTC