Stellar Lumens has been approved for trading on the itBit exchange. In a move that strengthens the standing of the cryptocurrency Stellar Lumens (XLM), financial sector regulators in New York have given it the “green light”.
What The Listing Means for Stellar and itBit
For Stellar Lumens
Currently, Stellar Lumens is one of the top ten most valuable cryptocurrencies in the market. Its market capitalization tops $4.3 billion. This is a big boost for the coin. It means that authorities are not treating it as a security like a stock or a bond. If Stellar Lumens was viewed as a stock it would have to go through SEC registration as a broker-dealer.
With this approval, Stellar Lumens could be listed on more cryptocurrency exchanges. If it is, that could mean a surge in its price. That’s what happened with Ethereum Classic recently. When Coinbase added Ethereum Classic to its roster, that coin’s price rocketed up 20%. Coinbase is the largest United States cryptocurrency exchange. That exchange also offers trading Ethereum, Bitcoin, Litecoin, and Bitcoin Cash.
The price of Stellar Lumens had already experienced a 5% jump when the digital currency market bounced back after a sell-off. This happened prior to itBit’s announcement.
ItBit is a digital trading platform. It is designed for institutional investors. Before this announcement only Bitcoin trading was offered. Along with the Stellar Lumens approval, New York’s Department of Financial (NYDFS) services approved three other currencies. The way is now cleared for itBit to add Ethereum, Litecoin, and Bitcoin Cash.
Three years ago, the NYDFS granted itBit a banking law charter. That charter is a requirement for any company that wants to either store cryptocurrency or offer crypto trading for customers in the state of New York. ItBit was the first company awarded that authorization.
Why these four coins?
According to itBit, it wanted approval of these four digital coins because of customer demand. Company co-founder Chad Cascarilla explains, “these were the ones we heard from our customers they wanted the most.” Though itBit has not applied for approval of any other crypto at the moment, they do plan to add more. “We clearly want to get to the top 10, top 20 assets over time,” according to Cascarilla.
ItBit has been on the move in other ways too. Their parent company Paxos experienced a $65 million Series B funding adding to the already $30 million in venture capital previously raised. Though Coinbase is the number one cryptocurrency exchange for US dollar-Bitcoin pairs, itBit claims the #2 spot.
Their success is at least partially attributed to their approach. Other New York licensed cryptocurrency exchanges, such as Coinbase, target individual retail level investors. High end is itBit’s niche. Their business model is to attract wealthy individuals, private equity firms, hedge funds, and other top-end institutional market types.
Future plans for the company include adding secure storage of digital assets for their institutional clients and a service allowing digital currency to be used as collateral when for trades of risky assets.
Wall Street investors have been seeking a route to enter the market for virtual assets that meet their strict standards for compliance. This demand has not been lost on Cascarilla.
“The interest and the adoption from institutions and large firms that have a lot of credibility is very real,” he said. “That might not be reflected in the price today, but from what I see, will certainly be changing the landscape over the next six to 12 months.”