Ripple CTO David Schwartz has offered insights into the perplexing correlation observed between two major digital currencies, XRP and Stellar’s XLM. The observation has sparked a lively debate in the crypto community.
Exploring correlation
Schwartz pointed out that the trend of digital assets tracking each other is not unusual, attributing it to the market’s ongoing efforts to understand and value these assets.
“I think there are a variety of factors that might be at play and it’s hard to know which are real,” he said.
However, he expressed skepticism toward the theory that this tracking is predominantly due to Bitcoin’s influence on liquidity.
The discussion took an intriguing turn, with other users suggesting various causes, ranging from the influence of market algorithms to the possibility of a single actor manipulating both asset prices. Responding to these suggestions, Schwartz stressed the complexity of the issue.
He also speculated about a potential “self-fulfilling prophecy” at play, where past correlations between XRP and XLM could be influencing current market expectations and behaviors.
Current market standings
XLM was created by Stellar and founded by Jed McCaleb, who also cofounded Ripple.
At present, XRP and XLM are positioned distinctly on the crypto market. XRP is currently trading at $0.599006, with an overall market capitalization of approximately $32.3 billion.
In contrast, XLM is priced at $0.119945 after experiencing a similar daily growth rate of 0.7%.
Despite a lower market capitalization of about $3.3 billion, XLM maintains a steady presence on the market.
