Any investor knows that they can rarely go wrong with BTC and ETH, despite the price volatility associated with the two largest cryptocurrencies.
These two have had their highs and lows as price fluctuations go, but are still considered a solid store of value.
Beyond the major cryptocurrencies is a treasure trove of small cryptocurrencies, commonly known as altcoins.
In recent years, altcoins seem to take the cue from the likes of BTC and ETH; significantly growing in value and giving investors a good return on investment within a short time.
Here's a short write up on how we successfully traded NEO at the very beginning of this blog.
Some of these altcoins fetch a low price in the market, mainly $1 or less, and investing in them does not necessarily translate into breaking the bank.
Because of their bargain price tags, they are commonly called penny cryptocurrencies.
Let’s look at how they stack up against other cryptocurrencies.
The information provided here is for informational purposes only and should not be seen as investing advice. Our opinions on this site are only that, if you are considering an investment into cryptocurrency or anything we speak about on this site, please advise a trusted financial professional first, before doing so.
Penny Cryptocurrencies Are Like Penny Stocks
Generally, penny stocks are ‘high risk, high return’ investments, and so are penny cryptocurrencies.
Just like penny stocks, penny cryptos are known for their price volatility.
They fetch low prices in the market, but don’t be deceived by this as their prices can shoot up within a short time.
For instance, a small public company can see its price swell after it makes a positive announcement, for instance, about a new merger.
On the other hand, a new development can move the price of a penny cryptocurrency from a lowly $0.1 to $30 in hours.
Both penny stocks and penny cryptocurrencies are volatile and can’t be considered to be a store of value.
Are They Worth Your Time?
They might be high risk investments, but history has shown that penny cryptocurrencies can be worthwhile ventures.
Are they worth your time?
Definitely, but it will depend on your choice of altcoins.
In a nutshell, penny cryptocurrencies might not be the perfect slow but sure method of building a long-term, profitable portfolio of crypto assets, but make for short-term, high return trades.
The kind of altcoin you choose makes the difference and determines how your investing journey unfolds.
While it could boil down to luck, there are a few pointers that can help you narrow down on a potentially lucrative penny cryptocurrency.
One of these is research.
Do Your Research
The world of cryptocurrencies is awash with ICO projects and altcoins.
As a matter of fact, not every ICO succeeds .
A good number of them crash and burn.
So, how do you sift through thousands of projects to select the one that will most likely succeed?
By conducting lots of research on specific coins.
We've put together this ultimate guide to help you understand altcoin choices better though.
In crypto investing, timing is everything.
You’ll need to excel in timing to make the best out of crypto investing.
You don’t want to be too eager to invest because you might confuse a temporary price spike for a boom.
Again, you don’t want to wait for too long as you might end up investing when the coin is declining in value, thereby missing out on an opportunity to cash in from a previous price hike.
There’s also the risk of ending up with a dying coin which no one wants to buy.
What Drives The Price of Cryptocurrencies?
Each cryptocurrency project has its own vision, purpose, team and price.
As such, their prices vary wildly, with some commanding thousands of dollars in prices as others wallow in the $1 price tag.
What exactly drives the prices of cryptocoins?
A number of factors determine the price of crypto assets and how these prices change over time.
These include; the number of coins in circulation, demand for coins, whether the coin is new, its team members and social media hype among others.
Let’s look at the three key factors that dictate the price of coins
The principle of demand and supply also applies to cryptocurrency investing. This is why coins with a high circulating supply start with low prices.
The higher the supply is, the lower the prices usually are.
Importantly, the strength of coin’s white paper, vision and team matters a lot.
There’s some matter in knowing that even BTC started off as a penny cryptocurrency.
Rule of thumb; don’t let the high circulating supply deceive you that the coin’s price will continue to be low.
All in all, things could change quickly if the demand for these coins goes up and no sellers are present.
It’s A New Coin
This one is simple.
A new coin comes with all manner of hype.
Despite the hype, their prices are always low.
This usually changes as the demand for the coin shoots up.
At the first stages of an ICO, it’s really hard to rightly predict the direction that the price of a coin takes in both the short-term and long-term.
With new coins, you can bet on your gut feeling as no one knows if the new coin could soon turn out to be the next XRP.
From High To Low Price
It’s not unusual for the price of coins to fluctuate from a high to a low.
While most new coins see their prices spiking in the first few months following an ICO, few keep up their high price tags and many have their prices crashing within a short time.
When penny coins fall, it's very difficult for them to recover in the near term.
It’s a wise move to cut your losses and to try your luck with the next altcoin, unless you have super confidence in the declining coin.
Slow And Steady Price
Despite being in the market for a considerable length of time, the prices of some altcoins seem to stagnate, showing minimal to no change.
Most of these altcoins lack the hype, the innovation or the vision to attract more users, thus their not attracting investor demand.
If you realize that the cryptocoin you’re about to select has stagnated for ages, the rule of thumb is to avoid investing in such a coin as it’s likely to continue stagnating and would rarely bring any tangible returns.
However, there’s an exception to this rule.
Some coins take a considerable amount of time before they find their breakthroughs and this does happen in the crazy world of crypto investing.
How To Find A Coin’s Market Capitalization
The market capitalization of a coin is a great resource for any investor as it gives them an impression of the value of the coin.
Surprisingly, some penny cryptocurrencies like Stellar Lumens have a bargain price but a huge market value that places it in the top 50 largest altcoins.
So, how do you calculate the market capitalization of coin?
You’ll need to multiply the price of the coin by the circulating supply of that particular coin.
Simply get the average price of a coin from most major exchanges and look out for the number of coins in supply, or rather, in the hands of the public.
Important to note is that circulating supply and total supply are different metrics that can be confusing.
Here’s their key difference:
While circulating supply is the number of coins in the hands of investors, total supply is amount of coins that exists, minus the burnt ones if any.
Circulating supply is considered a better metric for determining the market capitalization of a coin.
Looking at the above factors, we’ve compiled a list of the ten best penny cryptocurrencies to watch:
It’s a digital currency platform designed to allow for peer-to-peer transfer of assets.
With a total supply of 21 billion RVN tokens, the price of this altcoin could go up astronomically if many people decide to use it, and this is the main reason it’s a top penny cryptocurrency to invest in.
Digicoin’s vision is to deliver a robust payment solution for online retailers.
Looking at the potential growth of the online retail industry, there’s a good reason to believe that Digicoin could soon be the favorite payment solution for retailers, and this will most likely drive up its price. It’s currently trading at $0.01009.
Formerly known as QLINK, QLC Chain is a blockchain startup that’s reimagining “distributed telecommunications”.
It seeks to allow people to buy phone service connectivity from their peers and not from a wireless service provider.
There’s no denying that the telecommunications industry is awash with some of the most powerful companies, but it needs a disruptor.
QLC Chain is branding itself as the disruptor for this industry. It already sounds like a promising project that could turn lucrative in a short time.
That said, you can buy this penny cryptocurrency for $0.0609 a piece to join the revolution.
After all, you stand a chance to make some good profits if things work out as planned.
This blockchain company is decentralizing the process of auditing smart contracts.
Based in San Francisco, Quantstamp has all the hallmarks of a successful ICO.
First, it exceeded its target during the ICO, raising over $20 million from the first round, against a target of $11 million.
With its token selling at $0.03 and a market capitalization of $23.6 million, it’s a penny cryptocurrency worth looking at.
Tron is committed to create a platform that decentralized the internet.
It’s a Chinese based platform that was launched in September 2017.
Tron has since emerged as a scalable decentralized network that’s ideal for creating decentralized entertainment applications.
Since its launch, it has raised its profile to become a leading blockchain startup with lots of potential, having churned out a number of Dapps on its platform.
It’s used by over 100 million people in over 10 countries.
A unit of Tron goes for $0.02 and its market cap stands at $1.6 billion, a staggering value that makes it a hot penny crypto asset.
This decentralized gaming platform is based on Ethereum’s smart contracts. Funfair gives Casino solutions to users by offering them fast, free and fair games.
It’s among the first gambling focused cryptocurrency. In January, it started the year as the 52nd largest cryptocoin in terms of market capitalization.
It has since shed its price and value and is the 67th most valuable as of this writing. Looking at how the adult entertainment industry is picking speed, it’s worth noting that FunFair could become one of the fastest growing altcoins in the near future.
Its token fetches $0.0156 in the market and is definitely a worthwhile penny cryptocurrency.
This is a virtual reality platform that’s built on top of the Ethereum blockchain.
Decentraland is completely owned by its users, a first in the cryptocurrency industry.
With it, you can buy plots of land which you can build upon and monetize.
The price of its token, MANA, stagnated before exploding late last year. One MANA is trading at $0.074.
This blockchain platform has made a name for building an anonymous payment system.
It’s the first ever cryptocurrency to be based on the CryptoNote technology.
It's also one of the oldest cryptocurrencies, having been launched in 2014.
The CryptoNote technology technically differs from that of Bitcoin and related cryptocurrencies, and this is perhaps what makes Bytecoin a credible altcoin that’s focused on anonymous transactions.
CoinMarketCap places its price at $0.001774 as of writing.
Polymath’s branded as a blockchain ecosystem for security tokens.
It’s building a platform where security tokens which will be compliant to regulations will be created and traded.
Through its platform, investors can post ideas for security tokens that they need to build and developers bid to win contracts.
There are thousands of ICO projects out there this goes a long way to show the potential of Polymath to disrupt the industry.
The good news is that you can become part of their revolution by investing in their toke, which retails at $0.203 per unit.
Cadarno was released in September 2017 as a smart contract cryptocurrency platform that will also run side chains and Decentralized Applications.
It seeks to solve the scalability problem that seems to affect most cryptocurrencies.
Cardano’s native cryptocurrency is ADA. Since its launch, ADA’s price has been volatile, oscillating between a high of $1.3 and a low of $0.076. At $0.076 per ADA, it’s one of the best penny cryptocurrencies to invest in.
It’s the 9th largest cryptocurrency, and this only shows its potential as a promising investment.
Time To Dive In Deeper
It's clear that we've laid out manner choices for you.
The best piece of advice would be to conduct your own research and let u know any additional findings.
It's better if we all trade together, rather than separately right?
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