Grayscale’s Stellar Lumens Trust Reports 10% Increase in Net Assets Amid XLM Surge

Grayscale Investments LLC has submitted its 10-K filing for the fiscal year ending September 30, 2024, for the Grayscale Stellar Lumens Trust (XLM). The report provides a comprehensive overview of the Trust’s financial performance, noting a 10% increase in net assets despite market fluctuations and expenses.

The Grayscale Stellar Lumens Trust, established as a Delaware Statutory Trust, is structured to hold Stellar Lumens (XLM) and issue shares to accredited investors in exchange for XLM deposits. The objective of the Trust is for share values to reflect the market value of XLM, minus expenses and other liabilities. However, shares have historically seen variations, trading at premiums or discounts relative to the Trust’s net asset value (NAV) per share.

According to the filing, all XLM assets held by the Trust are secured by Coinbase Custody Trust Company, LLC. There is no redemption program in use, meaning shares cannot be redeemed by the Trust itself. The report lists potential risks such as extreme price volatility, changing regulations, and the classification of digital assets as securities, which could impact operations significantly.

The Trust’s expenses include a sponsor’s fee, paid in XLM, alongside potential extraordinary expenses arising from legal or regulatory developments. Events such as forks or airdrops might also affect the Trust’s holdings.

In recent developments, the price of XLM surged by 58% over the past 24 hours, reaching $0.45, attributed to the positive sentiment generated by the 10-K filing. Charts indicate, however, that this increase could be temporary as indicators suggest XLM has entered overbought territory, hinting at a possible price correction.

The Relative Strength Index (RSI) for XLM stands at 92.54, significantly above the overbought threshold of 70. This suggests a potential drawback, as prices might realign to support levels around $0.35 or even $0.23 if selling pressure increases. Despite this, increased buying pressure could push prices upward, aiming for a previous high of $0.52.

This analysis reflects current market trends and represents observational insights rather than financial advice. Individuals and investors are encouraged to conduct their due diligence before making investment decisions.