Ripple CTO David Schwartz Sheds Light on the Correlation Between XRP and Stellar (XLM)

XRP and Stellar (XLM) are two cryptocurrencies that have been constantly compared in terms of price growth and development.

XRP and Stellar (XLM) are two cryptocurrencies that are often compared in terms of price growth and development. Both digital assets are designed to facilitate cross-border transactions.

In March, a discussion about XRP began, and Ripple CTO David Schwartz shared some interesting insights into the correlation between XRP and Stellar (XLM).

Schwartz openly admitted in an X post that he had no idea what factors were driving XRP's price. It may be surprising to hear such a statement from one of the key architects of XRP Ledger, but it highlights various market factors that could be influencing the XRP price action.

He then noticed a crucial point:

“The only real objective data point I have is that XRP tracks the price and market cap of XLM incredibly well over all time frames.”

This observation suggests that XRP and XLM share a closely connected path, despite the complexities influencing the price action.

XRP and XLM have the same origins, as XLM was created by Jed McCaleb, a co-founder of Ripple who later left to start Stellar. Both tokens are intended to facilitate cross-border payments, although they cater to different markets and use cases.

The correlation highlighted by Schwartz could indicate that market forces affecting one of these tokens often influence the other. However, the precise reasons for this correlation remain speculative, as Schwartz himself has mentioned the lack of clarity on the exact drivers behind XRP's price.

The CTO had previously shared a chart displaying a strong correlation in the price movements and patterns between XRP and XLM tokens and explained the distinct reasons behind XRP and XLM's unique price movements.

Even back then, the Ripple CTO admitted that he lacked a precise explanation for the price correlations, but he offered two major factors that could be influencing the price trends.

Schwartz stated that comparable market forces that regulate various cryptocurrencies also control XRP and XLM. He added that most investors and crypto enthusiasts often place XRP and XLM within the same category due to the cryptocurrencies' historical connection. As a result, a significant number of people engage in buying and selling XRP and XLM simultaneously, causing the cryptocurrencies to have similar price movements.

XRP and XLM have both garnered significant attention and are considered to be the leading contenders for cross-border payments and mainstream adoption. While they tend to display similar price tracks, there still needs to be some clarity on the correlation between the two.

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