5 Ways To Invest In Stellar Lumens In 2021
When Jed McCaleb with lawyer Joyce Kim founded the Stellar network in 2014 and released the first Stellar Lumens, their goal was to reach the world's unbanked. After a short while, they shifted the focus to enabling financial institutions to connect and work together through blockchain. The coin's supply was 100 billion Lumens (XLM) then, but the network later reduced it to 50 billion XML. The current circulating supply is fixed at 20.7 billion. This creates artificial scarcity, making XLM tokens ideal for investors.
Keep reading for more on how to invest in Stellar Lumens.
1.Trade Stellar Lumens
To trade Stellar Lumens, you need to find an XLM brokerage. There are plenty of these platforms out there.
However, you can only start betting on the coin's price through a financial product such as Options, Futures or Derivatives after finding a reliable broker.
Remember that since October 2019 when the community voted to end the coin's inflation mechanism, no more coins were created. In theory, this means the cryptocurrency is immune to inflation. However, the change of protocol only helped to put the market forces under control. In other words, like other crypto, the price of Stellar Lumens is volatile. So, through this type of trading, you can take advantage of the volatility without managing or owning the coin.
Besides, since the current supply is fixed, investors don't need to purchase machines or set up expensive rigs to mine the coin. By trading the coin, anyone can make money in the crypto market.
The short-term trading strategy is suitable for investors looking for a secondary source of income. However, whether you want to be a long-term trader or not, you need some skills and experience. Due to the coin's volatility and security risks, we recommend that beginners start by acquiring the required knowledge and skills. They should also start small to get adequate time to learn from their mistakes without losing money.
Where to trade Stellar Lumens
As already mentioned, to trade in Stellar, you've to go through an online cryptocurrency broker. Since there are many scams today, you need to do your due diligence.
You can minimise the chances of falling prey to scams by considering their credibility. The most trustworthy platforms comply with regulatory requirements, have been in the market for a long duration and enjoy excellent customer support. The right brokerage should also have the desired trading pairs.
You should consider the transaction cost. Many users are concerned that cross-border transactions are not inclusive to most fiat-based payment systems like Paypal and other financial institutions. So, you may need to think about the payment method and the costs involved. Overall, legit brokers should charge appropriate fees with no hidden charges. When you send money on the network, you pay about 0.00001 XLM. However, commissions, withdrawal fees and trading costs can vary depending on the broker.
The brokerage's responsiveness also matters. You can save a lot of time by working with one that responds to your concerns fast enough.
At this point, you can see why we say that the choice of your broker is key to your trading success. If you're looking for a reliable one, we've recommended some of them below.
2. Buy and HODL
Buy and HODL is a long-term strategy of investing in Stellar Lumens. The term "hodl" originates from a misspelling of 'hold.' It was first featured on the post by a drunk, semi-coherent crypto trader on December 18 who was responding to the impact of the surging Bitcoin price. In January 2013, BTC was worth under $15, but it rose to more than $1,100 in the early days of December of the same year.
After the post went viral, HODL became a byword in the cryptocurrency world. Due to the volatility of Stellar Lumens, you can use the buy-and-hodl strategy when anticipating its value to increase.
Buying Stellar Lumens
Since we want our readers to have a complete understanding of expert tips to invest in Stellar Lumens, we've dedicated pages that provide all the information you may require to buy XLM. You can use a wide variety of payment methods to purchase it. Please note that the right method depends on your broker and your country. Besides, the payment methods come with varied operational costs and buying expenses.
You can find the relevant links below:
3. Invest in Cryptocurrency and Blockchain Companies
Investing in Stellar Lumens and blockchain financial institutions is a viable method to profit from rise in the crypto as well as related companies.
It allows you to rely on the expertise of the firms that have heavily invested in the coin or use blockchain. When they succeed, your earnings increase too. You could also benefit from the increase in Stellar Lumens' value.
If you want to invest in shares of Stellar Lumens/blockchain-based company, you still need the service of a reliable broker.
Where to invest in Stellar Lumens shares
As the name suggests, brokers work on behalf of companies that trade in Stellar Lumens shares. Before you invest, you should look for the right company. After that, find a broker that can help you to open a trading position. Investors follow the same traditional trading principles to do all these. The only difference is that they invest in Stellar Lumens-based stock.
There are plenty of crypto brokerage platforms today, so you won't struggle to find one. Choose one that suits your needs. The best way to do this is to consider the most important factors before committing to work with any single broker. The ideal factors include the design of the user interface, level of regulatory compliance, supported payment methods, and trading, and operational costs. It's also a good practice to look for user reviews from independent sources and use the information to evaluate the brokerages' service quality further.
Due to a large number of brokerages out there that appear legit but are not, new Stellar Lumens traders might still find it difficult to make an informed decision. We've carried out in-depth research and discovered several credible brokerages that you can work with if you deem fit. Find the recommended brokers below.
4. Become a Staker
As we mentioned earlier, Lumens is unique in that it has a fixed circulating supply of about 20 billion coins. The Stellar foundation uses close to 30 billion coins to manage the network. In other words, you can't mine XLM. Besides, you may not stake it traditionally.
Staking- Staking involves purchasing a cryptocurrency to earn the right to validate transactions. It's also called the Proof of Stake protocol, and as the name suggests, it gives the 'stakers' a higher stake in the management of the network.
You can stake XLM tokens, but the staking protocol is unique since you can't 'mine' new coins. All you can do is cast a vote for a staking pool of your choice. You receive a 1% dividend per annum. This reward is fixed. Remember, you need Lumens to use Stellar, so you must buy a few coins before starting to stake.
Where to store Stellar Lumens
When you stake Stellar Lumens, you expect to receive some income. You help to secure the network and validate transactions, which is essential for the network's success. Before staking, you should open or acquire a compatible crypto wallet. This is where you'll receive your rewards. If you have got a secure wallet, you can use it to store the coins too. Here are the major digital wallets:
- Hardware wallets: These are physical devices that can store Stellar Lumens and other cryptocurrencies in an offline environment.
- Software Wallets: These wallets come in the form of web services, mobile apps and desktop apps. They store your coins in an online environment.
Remember to ensure your wallet is compatible with the XLM tokens. We've provided some compatible wallets below.
5.Become a Stellar Lumens Developer to Make Money
If you need an alternative means to make money, you can become a Stellar Lumens developer. This is the most complicated option, but it pays much better than all the rest. If the project succeeds, you could earn significantly more than many of the best-paid workers in the country.
To become a Stellar Lumens developer, you should learn computer programming languages like Python. Java, C++, PHP, and others that blockchain projects use. Higher education could give you an added advantage. With the skills, you can create the right platforms to start making money without investing or trading the coin.
Expert Tip on When and How to Invest in Stellar Lumens“ If you've had second thoughts about how and when to invest in Stellar Lumens for any reason, the above information is what you needed to make the first step. You can opt for one or more of the methods discussed above to begin your investment journey. For most investors, the best way to make an entry into crypto investment (including for XLM) is to buy during market dips or around key developments/news that can shape future prices, and then hold. But before investing in the coin, you should note and ensure you understand its potential by factoring in aspects like price history and future developments. As long as you've got an in-depth knowledge of the market and Lumens, you can start investing in it anytime. ”