Stellar Lumens Supply Burn
By Nicolas Abington | Crescent City Capital Market Analyst Intern
Stellar Lumens (XLM) just received a 20% increase in price following a supply burn of 52.3% or removal of 55 billion stellar lumens from the tradeable market. The Stellar Development Foundation decided that cutting their supply would help them achieve their goals of mass adoption and the creation of their “Stellar Blockchain Project.” While this decision has proven great for Lumen investors in the short run, the precedent of suddenly cutting your coin’s supply in half is nerve-racking for long term investing. Stellar has essentially marked itself as an unpredictable asset that is susceptible to the whims of the Stellar Development Foundations. As the XLM investment proves to be more unpredictable, the chance of leaving their current bear market becomes less and less likely. While the supply burn might be helping with the ultimate goal of Lumen adoption, the precedent being set is still unnerving to the long term investor. Going forward we must look at these actions by the SDF with scrutiny as to not succumb to knee jerk reactions caused by quick gains.