The cryptocurrency stellar, also known as XLM, jumped about 20% Wednesday following news that online payments provider Stripe is considering adding support for the digital currency on its platform as it phases out bitcoin. The announcement comes as bitcoin, the world's largest cryptocurrency by market capitalization, has seen its transaction times leap to well over 24 hours, compared to stellar's at 2 to 5 second average.
At a price of $0.57 on Wednesday afternoon, XLM has jumped about 13.3% on the news, according to website CoinMarketCap. In May 2017, the digital coin was worth less than half a cent. After jumping to a $10.3 billion market value, stellar became the sixth-largest cryptocurrency.
On April 23, Stripe will stop accepting bitcoin payments after doing so for about four years. "Bitcoin has evolved to become better-suited to being an asset than being a means of exchange," said Stripe. The company highlighted various issues with bitcoin, including its large spike in transaction confirmation times, transaction failure rates and growing fees. "Empirically, there are fewer and fewer use cases for which accepting or paying with bitcoin makes sense."
A Second Act for Bitcoin?
Stripe's product manager Tom Karlo wrote in a company blog post that, "we may add support for Stellar (to which we provided seed funding) if substantive use continues to grow." Stellar is just one of a handful of cryptocurrencies that the Silicon Valley-based fintech company is considering. The firm said that it will also keep and eye on other cryptocurrencies—including ethereum—while "paying close attention to the ecosystem." The payments processor has not ruled out the possibility for bitcoin to "become viable for payments again in the future."
Stripe powers transactions for more than 100,000 global businesses and individuals. Its customers span industries and include Warby Parker, Under Armour Inc. (UAA), Target Inc. (TGT), Blue Apron Holdings Inc. (APRN), and OpenTable. (See also: Bitcoin Could Lose 90% of Its Value: Street Vet.)
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