Good day, thanks for the click!
Stellar Lumens: The utility token and the life blood of the Stellar Network.
Lumens are used to pay transaction fees, create trustlines and transfer value. Everyone needs Lumens to activate an account. This "need" creates a demand for Lumens, and demand is one reason a token's price could go up.
$1,000 Stellar Lumens Soon?
Will Lumens be a $1000 coin someday? I don't think so. There's always a chance that Bitcoin goes to the moon and drags the rest of the crypto world with it, so anything is possible.
During the 2017-2018 bull run, another cryptocurrency project, NEO (currently trading at $7.04), reached an all-time high of $195.95 USD.
NEO's utility token, GAS (currently trading at $1.10), reached its own high of $106.25 USD. Lumens are more comparable to Gas over the primary NEO token. Gas and Lumens play the important role of paying fees on their network, so even if someone holds their own Stellar token, they need Lumens.
$1 Stellar Lumens Someday?
Could Lumens become a $1 coin someday? This seems more reasonable. Even a $10 Lumen is possible and here's why.
There were reports a few weeks ago about the United States adding a stablecoin to the COVID-19 stimulus bill. This stablecoin concept didn't make it into the final version of the bill, but it tells us that there are lawmakers that want to digitize the US dollar, probably for nefarious reasons, "control" the most likely. Every crypto project that can tokenize an asset was daydreaming about the US Government choosing their network, Stellar included. Lumenauts were giddy about the possibility of 330 million US citizens storing their USD on the Stellar Network.
Since a user needs a few Lumens (currently 1.0) to activate an account, that would mean 330 million Lumens locked up and untouchable. We talked about demand driving up prices earlier. This would be like Bitcoin's halving and we know what happened six to nine months after Bitcoin's 2016 halving.
Ripple's XRP had an all time high of $3.92 USD and Lumens usually move when XRP moves. After Stellar's coin burn November 2019, the total supply of Lumens, 20 billion, is half the total supply of XRP, 43 billion. One could project Stellar Lumens, who had an all-time high of $0.93 USD, to 10X to $9, then follow Bitcoin's lead, inflating to $20 or even $50. As the saying goes, "A rising tide lifts all boats."
I believe we would need to see a $100k-$150k Bitcoin for this to happen, so definitely not a short term goal.
5-20 Cents for Life?
Could Lumens stay at 5-20 cents? Sure, I can imagine a scenario where Lumens remain a "transaction fee vehicle" and price not be driven by speculation but it seems unlikely. The Stellar Network has too much value and Lumens play too big of a role to be left out of the fun. As the Stellar Network grows, more and more people will have Lumens in their possession. They'll need Lumens when they install a stellar DAPP, transfer funds, and people might outright pay for goods with Lumens, since every wallet could hold the native token $XLM without a trust line. I think we'll reach a point where everyone has a small bag of Lumens.
If Bitcoin goes on a new, all-time high rampage, I believe we could see a $10-$15 Lumen before we return to the accumulation stage. This would be an exciting time to be a Lumen holder. Those users that received the second Keybase Stellar Airdrop of 355 XLM would see that bag be worth $5,325 USD. Not bad!
Please share in the comments section where you see Lumens reaching during the next bull run.
Thanks again, and have a "Stellar" day! - Lukas