Stellar Price Forecast

Stellar (STR) Price Prediction

Since this page seems to be one of the more popular pages on Crypt.la, I’m going to update it regularly as I learn new information and change my stellar (STR) price expectations.

Original Stellar Price Prediction

12/6/14: Stellar started as a result of a spat. Stellar co-founder Jed McCaleb was one of the co-founders of Ripple, too. When he butted heads with Ripple CEO Chris Larsen, he set out to create a competing payment network. So, he left Ripple some ill will, a nice chunk of change in the form of 9 billion ripples (XRP), and a good notion about what was working with Ripple and what wasn’t.

There are advantages and disadvantages to such a start. First, McCaleb’s intimate knowledge of what was working and what wasn’t at Ripple gave him the ability to hit the ground running. He came up with some cool ideas, too: like Stellar’s distribution model, which gives free Stellar (STR) to anyone who creates an account and links that account with Facebook. What’s more viral than giving FREE money to people to create an account on your platform?

McCaleb has enlisted some high-wattage assistance to take on Ripple. He co-founded Stellar with Stripe CEO Patrick Collison and he lured a member of the PayPal Mafia in Keith Rabois (Khosla Ventures) onto Stellar’s board.

Per Stellar’s website, they currently have 15 team members, 3 board members and 10 advisors. They also have job postings for at least another 7 spots. That small team has done a lot in the past three months since their public launch. They’ve given away over 1.5 billion STR. They’ve got at least two gateways on board, and more than 4 million people have created Stellar wallets and linked those wallets with their Facebook accounts. That number, by the way, absolutely dwarfs the number of Ripple wallets, which have been created (there are fewer than 130,000 Ripple wallets in the ether at the moment).

While they may have gotten 4 million people to create Stellar wallets, that doesn’t mean those people know what they are or what they’re doing with them. Indeed, if we go to CoinMarketCap.com, you can see STR trading volume hit about $30,000 over the past 24 hours. XRP trading volume hit $1.3 million over the same time span. That’s 43x the transaction volume.

Right now, Ripple’s market cap stands around $442 million vs. $8.4 million for Stellar. That makes Ripple 52x larger than Stellar. It’s clear that Ripple has first-mover advantage, and I think that’s what will help it succeed in the long-run. That’s not to say that Stellar will disappear. Instead, I think they’ll co-exist with Stellar playing little sister to Ripple much like Litecoin takes a backseat to Bitcoin.

Without fundamental differences in the underlying technology, why would Stellar overtake Ripple? Because it’s newer and less well known? Because people like Jed McCaleb better than Chris Larsen? Because the name sounds better?

I’m being a bit tongue-in-cheek, but the fact remains, Ripple and Stellar just aren’t different enough to make one better than the other. In that case, I’m putting my chips on the first mover: Ripple. That’s not to say Stellar can’t outgrow Ripple in the years to come, and I’m not even saying I won’t be investing in Stellar, I just think Ripple’s lead is too large.

So, I say all that to set the stage for my price prediction for STR. In the near-term, prices could be extraordinarily volatile, particularly since all the STR that got created hasn’t been distributed yet. Right now, just 3.5 billion STR are in circulation. If McCaleb and Co. are successful in stoking enough investor interest in the network, perhaps they could catapult Stellar’s market cap to the size of Ripple’s (north of $400 million). That would make each of the 3.5 billion STR worth $0.11. I wouldn’t be surprised to see STR hit that level in the near-term. However, I would argue STR has a lower intrinsic value than XRP. STR’s current price ($0.0024) isn’t that far behind XRP’s current price ($0.014), but that’s because there are about 28 billion fewer STR in circulation than there are XRP. If STR did hit $0.11, that would be a gain of nearly 4,500% over current prices.

Please keep in mind that trying to predict the value of a cryptocurrency is like trying to predict the weather on Jupiter on Jan. 1, 2086.

Photo by David Cowan.

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3 comments

  1. Tommytraint

    Could you please include the impact of Stellar’s commitment to give away for free 95% of all stellar … What is the value of something acquired for nothing?

    • Fred
      Fred Marion
      Author

      I’m not sure what impact that will have on prices. There is the “cost” of learning what Stellar is before you can acquire it, use it and sell it. If someone’s willing to pay for something that you own, who cares if it was acquired for nothing! 🙂

      You are right, though, that if they’re not “selling” Stellar to investors, but instead are committed to giving it away for free, that could have a major impact on the price of STRs. Let me think about it and post an update soon.

  2. bravo

    there are not 4 million different users!
    the people faked many different stellar and facebook accounts.
    i think thre are not more than 500.000 users currently .
    on bitcointalk stellar thread you can see post like this one:

    Quote from: arieq on December 14, 2014, 07:30:59 AM

    So strange, I am able to login now using a new IP address, it seems that my previous IP was blocked by the server because I logged in to all of my str accounts in a row

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