Is XLM a Good Investment? (2025)

Why is XLM a good investment?

Stellar is a decentralized blockchain platform built to make money transfers and international payments cheaper and faster for individuals and banks. Since launching in 2014, Stellar has partnered with major companies and processed billions in transactions.

Fast and affordable cross-border payments

Stellar processes transactions in approximately 5 seconds with fees under a penny. That means Stellar is a great choice for people looking to send money abroad or buy coffee with crypto. 

Major institutional partnerships

PayPal announced plans to integrate its PYUSD stablecoin on Stellar, which could bring in millions of new users to the blockchain. In addition, Stellar has partnered with organizations like MoneyGram International, Franklin Templeton, WisdomTree, PayPal, and the United Nations High Commissioner for Refugees.

Real-world asset tokenization capabilities

Stellar provides native support for tokenizing real-world assets including currencies, commodities, and securities. In April 2025, the Stellar Development Foundation announced plans to bring $3 billion of real-world assets on-chain through partnerships with Paxos, Ondo, Etherfuse, and SG Forge.

Growing developer activity and network usage

Stellar's Q3 2025 report showed over 1 billion operations processed, a 37% increase in full-time developers, and a 700% rise in smart contract invocations. The network has approximately 10 million users and has processed billions of  transactions. 

Fixed supply

Stellar has a maximum supply of 50 billion XLM, with approximately 32 billion currently in circulation. This cap on supply means that it’s possible that XLM’s price will skyrocket if adoption continues to grow. 

XLM currently holds a market capitalization of approximately $8 billion, ranking it among the top 20 cryptocurrencies. This shows that Stellar currently has strong real-world adoption. 

What is XLM?

How does Stellar work? 

Stellar aims to solve the inefficiencies in traditional cross-border payments by creating a global payment infrastructure. The network allows users to send, receive, and exchange multiple currencies quickly and affordably. For example, Stellar can allow a user to transfer USD to EUR across borders within minutes. 

How does Stellar verify transactions? 

Stellar uses the Stellar Consensus Protocol, which allows the network to process transactions in 3-5 seconds at minimal cost. 

Stellar uses a unique consensus mechanism, where each node selects a trustworthy validator. This design means faster speeds and less energy consumption compared to proof-of-work systems like Bitcoin. 

The network was co-founded by Jed McCaleb and Joyce Kim in 2014 and is overseen by the nonprofit Stellar Development Foundation.

What is XLM?

The Lumen (XLM) is Stellar's native cryptocurrency. XLM serves multiple purposes within the network: it is used to pay transaction fees and acts as a bridge currency to help facilitate transactions. 

Every account must hold a small amount of XLM to prevent spam and ensure network security. 

What are the risks of investing in XLM?

Extreme volatility and major drawdowns

Like all cryptocurrencies, XLM is highly volatile. XLM reached an all-time high of $0.94 in January 2018 but fell to approximately $0.11 by the end of that year. 

Competition from alternative payment blockchains

Stellar faces competition from Ripple (XRP), which serves a similar purpose with stronger institutional partnerships. Ethereum Layer 2 solutions and other payment-focused blockchains also compete for the same market share in cross-border payments and tokenization.

Centralization concerns

While Stellar operates as a decentralized network, the nonprofit Stellar Development Foundation does maintain influence over the ecosystem's direction and development. 

Dependency on institutional adoption

XLM's value relies heavily on continued adoption by financial institutions and payment providers. If partnerships fail to materialize or existing partners move to competing platforms, xlm’S price could stagnate. 

How does XLM compare to competitors?

Let's compare XLM to one of its biggest competitors.: XRP. 

XLM vs. XRP

Similar to XLM, XRP was created to make cross-border transactions faster and cheaper. 

XRP’s parent company Ripple operates as a for-profit, focused on serving banks and large financial institutions for cross-border transfers. At the time of writing, XRP currently holds a market capitalization approximately 10 times larger than XLM.

Ripple's XRP Ledger is considered relatively centralized. Meanwhile Stellar's consensus protocol is more decentralized, enabling users to reach agreements collectively. Both networks settle transactions in approximately 5 seconds with minimal fees.

XLM's advantages: Stellar's focus on financial inclusion makes it appealing for remittances and serving unbanked populations. In addition, some investors prefer Stellar’s decentralized structure. 

Where XLM struggles: XRP has significantly stronger brand recognition and institutional adoption. As a result, it’s possible that banks exploring crypto solutions may choose XRP over XLM. 

XLM historical performance

Early days (2014-2016)

Stellar launched in April 2015 with an initial exchange rate detected at $0.00279, and the lowest price was $0.00146 in November 2014. The cryptocurrency traded at fractions of a cent during its first years as the network established its infrastructure and secured initial partnerships. 

The 2017-2018 bull run

XLM surged to an all-time high of $0.93 in December 2017. 

The rally was driven by increased interest in a broader bull market in cryptocurrency and Stellar's partnerships with major financial institutions. The rally ended when the broader crypto market crashed. During this period, XLM lost over 88% of its value from its peak. 

Recent performance (2024-2025)

By the end of 2024, XLM rallied to $0.63, its strongest price in years, supported by growing interest and new partnerships. Major catalysts in 2025 included PayPal's announcement to integrate PYUSD on Stellar and expanded institutional partnerships for real-world asset tokenization.

What's a good price prediction for XLM?

Making accurate cryptocurrency price predictions is difficult. The crypto market involves complex dynamics influenced by multiple factors that are hard to forecast with certainty.

Rather than betting on specific price targets, consider the fundamentals. Is Stellar still gaining partnerships with major financial institutions? Are developers building applications on the network? Is transaction volume growing? These factors matter more than any prediction model. 

If you believe in XLM's long-term potential as payment infrastructure, you should consider investing. 

How do I buy XLM?

XLM is available on major exchanges including Coinbase, Kraken, Gemini, Binance, and Binance.US.

Step 1: Create an account

Choose a trustworthy exchange and sign up with your email address. You'll need to provide basic information including your name, address, and date of birth.

Step 2: Verify your identity

Complete the exchange's identity verification process by uploading a government-issued ID. This process typically takes 24-48 hours.

Step 3: Link a payment method

Connect a bank account or another payment method to fund your account and start making purchases.  

Step 4: Buy XLM

Search for Stellar or XLM on the exchange, enter the amount you want to purchase, and confirm the transaction. Your XLM will appear in your exchange wallet within seconds.

Conclusion

Stellar has established itself as a payment-focused blockchain with fast transaction speeds, low fees, and growing institutional adoption. 

XLM remains highly volatile and faces strong competition from Ripple, Ethereum Layer 2 solutions, and other payment blockchains. The network's success depends on continued institutional adoption and real-world usage.