Analyst: Stellar Burn could increase the chances of delisting on exchanges
The unanimous decision of the Stellar Development Foundation (SDF) to halve XLMs could be a problem for the project, believes the well-known Bitcoin Maximalist WhalePanda.
The anonymous trader said that the crypto currency exchanges could treat XLM as a security and stated that SDF showed excessive control over the blockchain asset when it withdrew its offer from The move increases the chances of removing XLM from exchanges that pay attention to which digital asset they list on their trading platforms.
% of the supply actually makes you even more secure and increases the chances of getting delisted on exchanges. $ XLMhttps: //t.co/4KiR9wVA9r
– WhalePanda (@WhalePanda) November 5th 2019
So far so good
The explanation came nearly a year after the New York Department of Financial Services (NYDFS) had allowed a local stock exchange (itBit) to list XLM. The department made no official classification about the original category of cryptocurrency.
Such cases also prompted other US exchanges to list XLM pairs on their trading platforms. CoinBase, based in San Francisco, began offering full-size XLM in the Americas starting in March, except New York. However, in September
Why the stock exchanges are pleased with the listing of XLM was the nonprofit support. SDF has never behaved like an organization that wanted to sell XLM for profit. For example, in September, SDF announced a massive $ 1 million ($ Group Messaging, Community and File Transfer Hub.
In contrast, Stellar’s closest competitor Ripple sold its hundreds of millions of dollars of XRP holdings to increase its acceptance. Ripple remains in litigation with its early investors, trying to prove that XRP tokens are not securities.
But WhalePanda believes that the future prospects of XLM could be problematic on some exchanges. This is mainly due to the Howey Test of 50, a benchmark for the US Securities and Exchange (SEC) in determining which Assets are securities.
The law can see SDF’s decision to cut supply as an attempt to raise prices in the markets. However, since the token does not finance a for-profit company, there is always scope for discussion.
XLM on the up
The reduction of the offer meanwhile also raises the XLM price. XLM / USD has risen as high as , Investors believe that the shortage makes the cryptocurrency more lucrative – which in turn means that SDF’s move was an attempt to increase the value of Stellar.
Text Proof: newsbtc