As part of an overall strategy to find the best cryptocurrency to invest in, let us introduce you to a variety of potpular penny crypto choices that are available for investment in now.
**Please note this article is for educational purposes only. It is not financial advice. Be sure to do your own research and seek out financial experts when looking for help with investment strategies.
News about cryptocurrencies, particularly Bitcoin, is everywhere. You would be hard-pressed to find someone in finance who does not know about cryptocurrency. Even those who are not incredibly knowledgeable about finance will likely have a basic idea of what cryptocurrency is. Bitcoin is the dominating type of this new method of payment and investment. Since its inception in 2009, it has seen tremendous success as a store of value and has become a popular name in the crypto industry.
It is not the only big name, though. Digital currencies like Ethereum and Litecoin, while not reaching Bitcoin’s levels of popularity, are also notable names. DeFi coins like Uniswap and Aave, though largely unknown to the masses. have also created intriguing trading alternatives for savvy traders and developers. The entire crypto market is expanding with each passing year and many cryptocurrencies – while not exactly the same as bitcoin – contribute to the impact on markets that Bitcoin has had.
Beyond these major players in the crypto realm, very few people know about ‘penny cryptocurrencies’. Going by the name, one can assume that these are cheaper types of cryptocurrency. While there is some truth to that assumption, there is so much more ground to cover to fully understand them.
This article explains what exactly penny cryptocurrencies are and highlights some of the most relevant coins in the markets today.
What is a penny cryptocurrency?
Generally speaking, the term ‘penny cryptocurrency’ derives from the stock market, which is essentially investing in penny stocks.
According to the U.S. Securities and Exchange Commission, any stock trading below $5 per share is a penny stock.
A standard penny cryptocurrency, however, is a crypto coin whose market price is less than $1. As you can probably tell, one can classify a majority of cryptocurrencies that are currently in the market as ‘penny cryptos’.
It is important to remember that investing in penny coins or trades has the potential to be quite risky. If one is willing to take the risk, and if done correctly, it can potentially bring in huge profits. With a low starting price, penny investments offer the capacity to grow over the long term from an relatively inexpensive initial investment.
3 categories of penny cryptocurrency
Overall, there are 3 categories of penny cryptocurrencies:
- Newly issued cryptocurrencies
- Stagnant cryptocurrencies
- Crashing cryptocurrencies.
There is also a wide variety of cryptocurrency types that could fall into different categories, like tokens (issued of another’s blockchain) or coins (issued off their own blockchain). With that said, these three categories should cover a bulk of the main penny cryptocurrency types that you will encounter.
Category #1 – New cryptocurrencies
Before the release of a cryptocurrency, the hype focuses primarily on its Initial Coin Offering (ICO) or Initial Exchange Offering (IEO). Essentially this is the token generation event that enables people to invest early in a cryptocurrency project. This long term success of the project depends on many factors, including the business model, team expertise, utility of the coin, and many other factors. But ultimately, it all boils down to one specific principle: “Is this cryptocurrency going to be useful?” The price of a new crypto coin relies heavily on its launch, which usually happens through an ICO or IEO.
A lot of new cryptocurrencies begin with a substantially low market price. Because of this, it qualifies them as being penny cryptocurrencies. Should the coin prove to be useful and the project behind it viable and well funded, the price could start to increase not too long after the initial release.
How to find new crypto coins
What should you do to catch one of these penny cryptocurrencies early on? For that matter, what should you do to if you decide to invest in it? The answer is to keep a close eye on the market and do thorough research on up-and-coming crypto coins. Exchanges such as Binance frequently announce the latest coin they have launched on their platform. And ICO alert platforms keep a running tab of what ICOs will be occurring each month, giving you time to research the project. You can also read the whitepapers pertaining to each of the companies and Google news stories about them. Remember to also think logically. Will this new crypto fulfill a specific need? Will it serve a purpose? If so, then it could be the penny cryptocurrency you are searching for.
It is important to keep in mind that a new crypto’s price could remain at a low point for a long time following its release. This is regardless of whether it looks to be a coin that holds a lot of promise. The reason for this is typically due to people overlooking it. Similarly, they are not paying enough attention to what it does or what its purpose is.
Category #2 – Stagnant cryptocurrencies
The second type of cryptocurrency that you are likely to encounter is known as ‘stagnant cryptocurrencies’. These particular types of crypto coins are those that have been in the market for a considerable amount of time. However, their individual prices do not fluctuate very much.
Why are they stagnant?
Reasons for this stagnation are varied. It mostly depends on what level you wish to analyze it. There are some situations that may involve corporate interference. There are others that are nothing more than a loss of interest or a momentary pause in trading. [It is important to note that “momentary” is a broad term in this context.] Other times it may just be that development in a field as new as cryptocurrency can take time, as brand new problems crop up and solutions must be devised.
Admittedly, penny cryptos are difficult to describe. The non-fluctuation nature of their price has the capacity of being both a good and a bad thing. There are two ways of looking at it. On one hand, you may be happy with the lack of a decrease in the coin’s price. One could interpret this as a telltale hint that the crypto holds value and is extensively used. This is even if it is done quietly.
On the other hand, the inactivity of a cryptocurrency can mean that the developers are slowly abandoning the project. Moreover, it could indicate that they are not planning on developing the network that the coin draws from anytime soon. This results in a slow and gradual loss of investment and interest from the side of the user. This, in turn, leads to a sluggish demise for the cryptocurrency.
Category #3 – Crashing cryptocurrencies
Since the start of 2018, it has become a little tricky to explain this particular category. If you take it at face value, it appears to be obvious. Should the price of a cryptocurrency crash, then that essentially means that the coin is likely dying off. As accurate as that assumption may sound, that is not necessarily the case.
At some point during December of 2017, the cryptocurrency market suddenly began to crash as a whole. Up until this point, since the summer of that year to be exact, the price of crypto coins was steadily increasing. For example, Bitcoin came close to reaching the $20,000 mark. Many are predicting that it will reach that mark sometime again in 2020.
In January 2018, following the initial standstill of the price increase and the sudden direction change, the crypto market would crash indefinitely. Almost every cryptocurrency would experience a major decline in both price and market value. It was because of this that it was nearly impossible to say “if a cryptocurrency is crashing in price, that means it’s dead.” The market is seeing considerable stabilization lately. Moreover, plenty of crypto experts assure us that great things will happen in the future. As it is, we can only wait and see.
When it comes to penny cryptocurrency investments, this becomes trickier than before. You will need to conduct a great amount of research prior to placing an investment in a coin of this type. Be that as it may, reading a penny cryptocurrencies list will not be enough. You will have to possess enough knowledge of the coin to determine when exactly the price will stop crashing. Only then can you determine a good timeframe for placing an investment.
Why they are appealing
The vast majority of investors have a tendency to choose large cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Chainlink (LINK). And why wouldn’t they? These cryptocurrencies have immense popularity and enjoy a high level of liquidity. However, the number of investors that are beginning to favor smaller cryptocurrencies is on the rise. This is mainly because these cheaper cryptocurrencies only cost pennies to invest in. And it is because of the cheapness of these smaller coins that they have potentially huge growth prospects.
Overall, penny cryptocurrencies are an exceptionally high-risk investment. However, if we have learned anything from history, they have the potential to be lucrative investments. Ripple (XRP) and Stellar Lumens are two notable examples of penny cryptocurrencies that climbed up the ranks over time. Nowadays, they are huge players in the market, giving the bigger names in crypto some competition. Both have been in the top 20 crypto coins by market cap since 2018.
There are others who would rather invest in penny cryptocurrencies because they think they have the analytic skills and expertise to spot a good project in the making. For others, opting to invest in a cheaper coin enalbles them to have more choices. Whatever the reason or motivation is for their decision, there is a noticeable increase in people looking to invest in more obscure “penny” coins.
The best penny stocks to pick
The main takeaway from this is if you are looking for cheap cryptocurrencies, then penny cryptos are for you. There are over 2,500 cryptocurrencies to invest in, so you certainly have a wide variety of options to choose from. However, deciding on the right coin can be a daunting task. You will need to do a good amount of research on them because all cryptocurrencies are not equal. For that matter, not every coin will turn a profit.
With that in mind, let’s go over some of the most promising penny cryptocurrencies. Try to keep your eyes on these for 2020 and beyond.
1 – Ripple (XRP)
Current price: $0.455588 USD
Return on Investment (ROI) since earliest known price: 7,634.05%
Out of all of the penny cryptocurrencies on this list, Ripple is arguably the most popular of the bunch. “Ripple” is technically the company that is responsible for the creation of the coin, which goes by the name of “XRP.” However, everyone associates the name Ripple with the coin anyway.
Ripple sticks out from the crypto crowd, being the only fully centralized cryptocurrency to reach the top of the market. When at its peak, Ripple was able to nab the #2 spot, has rested comfortably as #3 for many months on Coin Gecko, trailing only Bitcoin and Ethereum. As a result, many were starting to see it as potentially becoming the “Bitcoin killer”. Of course, this would never come to pass.
There are a number of reasons as to why people love Ripple. A few of the key ones include the following, among several others:
- Speed of transactions (especially in comparison to Bitcoin)
- The team responsible for the development of the coin
- Many banks and governments around the world accept it
For many people, Ripple is among the best penny cryptocurrencies to invest in. This is especially true if you are a novice in the world of investment. Some of the penny cryptocurrencies lists that you find will often reference Ripple as the most popular penny crypto.
2 – Cardano (ADA)
Current price: $0.148802 USD
Return on Investment (ROI) since earliest known price: 588.47%
Cardano is quite an ambitious project. Those behind its development are some of the most knowledgeable experts in crypto, hailing from all over the world. Its main intent is to improve cryptocurrency scalability and make transactions much faster. Moreover, they hope to completely revolutionize the way in which cryptocurrencies work.
Cardano was successful with the implementation of the proof-of-stake (PoS) algorithm into their systems. This basically means that you are unable to mine Cardano. Instead, you can stake your coins and validate the transactions that other Cardano holders carry out within the blockchain. You will receive a share of the revenue afterward. However, it largely depends on the amount of ADA coins that you are staking.
When you compare this coin to others on this list, it receives comparatively less attention. However, many crypto enthusiasts and experts still view Cardano as one of the most promising projects out there. Very few penny cryptocurrency lists forget to include it as a coin that people should keep a close eye on.
3 – Stellar Lumens (XLM)
Current price: $0.104635 USD
Return on Investment (ROI) since earliest known price: 3,407.95%
Stellar Lumens falls under $1, though it is not technically a small-cap cryptocurrency. Be that as it may, it is still a decent choice. Especially if you are someone who is looking for a cheap cryptocurrency to invest in this year. It has one of the largest market caps out of all cryptocurrencies that are in circulation. It is because of this that XLM holds a lot of potential pertaining to growth.
This cryptocurrency functions on increasing the speed of the payment and decreasing the costs of cross-border transactions. Serving a market that generates multi-trillion dollars per year, it is one of the ‘leading’ cheap cryptocurrency to invest in. At the time of this writing, XLM ranks as the 12th largest coin in terms of market cap.
4 – IOTA (MIOTA)
Current price: $0.326955 USD
Return on Investment (ROI) since earliest known price: > 9000%
Blockchain technology is the main driving force behind IOTA. The IOTA Foundation is a German non-profit organization that was overseeing the IOTA virtual currency. It was also responsible for the launch of its Data Marketplace for a two-month demo during 2018. IOTA’s Data Marketplace is a setup that permits companies to sell data as a way to encourage data sharing.
In addition, this marketplace is entirely blockless. Conducting any transaction on the network is free. This, as a result, effectively solves one of the biggest restrictions pertaining to transaction fees in blockchain technology. Nowadays, it has a place among the best cryptocurrencies that are below $1.
5 – Ardor (ARDR)
Current price: $0.056764 USD
Return on Investment (ROI) since earliest known price: 54.46%
Ardor runs its operations on the ‘Blockchain as a Service’ (BAAS) business model. This, above all else, is the reason why many companies wish to invest in it. However, the fact is, blockchain is an incredibly complex piece of technology. The entry barrier for a majority of businesses is unbreakable. Ardor sets out to provide businesses with the ability to effortlessly incorporate blockchain into their operations. This is definitely an altcoin to watch as it could potentially service millions of different businesses.
6 – NEM (XEM)
Current price: $0.128496 USD
Return on Investment (ROI) since earliest known price: > 9000%
NEM is an acronym for the ‘New Economy Movement’. It is a smart asset system through which companies can develop their business platforms. It provides a system that allows for the construction of decentralized applications (DApps). The best way to look at it is like the Apple app store. It is a place where others can build upon pre-existing systems. It is a coin that has the potential to offer good returns in your crypto portfolio.
This peer-to-peer platform offers a ‘Messages’ feature. It includes a transaction that can be useful for securing communication and multi-signature transactions. Ones that provide protection for users to keep hackers away and secure community funds.
7 – BitTorrent (BTT)
Current price: $0.000312 USD
Return on Investment (ROI) since earliest known price: 160.23%
BitTorrent is one of the oldest cryptocurrencies but is also among the most popular. Its circulation occurs in over 138 countries and over the years it has captured 22% of total upstream traffic. More than 100 million users are able to trade in BTT on the regular.
BitTorrent gives content developers a way to connect with their audience. What’s more, it allows them to earn and spend digital currency without a third-party entity. A new endeavor between BitTorrent and TRON (TRX) will likely prove to be lucrative for investors and traders alike.
8 – Zilliqa (ZIL)
Current price: $0.022532 USD
Return on Investment (ROI) since earliest known price: 491.64%
Zilliqa is an ambitious infrastructure project for the blockchain industry. Their mission is to create a scalable and secure platform for developers and projects wanting to build decentralized applications. The team behind Zilliqa is a thinktank based at the National University of Singapore and is widely respected in the crypto community.
Their mainnet having launched in 2019, Zilliqa has provided the first usable system of sharding for scalability. They’re also well known for their unique and peer=reviewed smart contract language, Scilla, which powers the creation of Dapps. The ZIL coins has many use cases including non-custodial staking, and eco-friendly dual mining.
We hope you’ve enjoyed reading about potential penny cryptocurrency picks for your portfolio. To continue your research on investment stragegies, our blog is replete with investment guides like these:
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- Guide to Cryptocurrency Arbitrage: How I Made 1% Per Hour