Ever thought about the people who bought Bitcoin when it was hardly worth some pennies and didn’t sell it for years? Yeah! They must be millionaires now! Bitcoin is touching sky high prices now and it is kind of hard to even buy 1 BTC at this time. So, what is that you can do to take benefits from cryptocurrency and be the next crypto millionaire? Here, in this guide to penny cryptocurrencies, we are going to tell you, about how you can get the crazy drive of crypto by investing in coins that are worth less than even a dollar. Let’s start with the definition of what are penny cryptocurrencies.
What Are Penny Cryptocurrencies?
In simple words, penny cryptocurrencies are the cryptocurrencies that are worth less than a penny. As you know even the industry’s leading cryptocurrencies like Bitcoin, Ethereum was once penny cryptocurrencies. It is the main reason why everyone was so interested in cryptocurrencies in the first place because it actually made people millionaires in just a few years. However, not every crypto is alike and definitely not every cryptocurrency is Bitcoin. So, now the question is how to know which penny cryptocurrency is worth it and what are the factors that you should consider while investing in them?
Indeed investing in penny cryptocurrency is going to be highly risky like if you are riding a sea-saw but this time in the sky so if you go down, you’ll go dead. Not actually dead in this case but you’ll definitely suffer huge losses if things wouldn’t happen as you expected. This is why you should learn everything about these cryptos first and the risk associated with them to have a safe and enjoyable ride of profits.
Different Types Of Penny Cryptocurrencies
Now that you know what are penny cryptocurrencies, let’s know about their types. Penny coins are classified into four categories, newly minted cryptos, plentiful cryptos, stagnant cryptos and crashing cryptos. While newly minted cryptocurrencies and plentiful cryptocurrencies can be beneficial for investing, stagnant and crashing cryptos have rare chances of success. Let’s learn about each category individually.
Newly Minted Cryptocurrencies
As the name suggests itself, newly minted cryptos are the new cryptocurrencies in the industry. Investing in new cryptos can provide you with high returns. Although, it’s hard to judge these cryptocurrencies as they don’t have much of history. Do thorough research on such cryptos before investing in them to stay away from fraud schemes.
Plentiful cryptos are the coins with large supplies, for example, Ripple. It is their large supply that keeps their prices low and these types of coins can make a great investment.
These types of cryptocurrencies are the one that has been in the market for a while now but haven’t seen any growth in prices. Stagnant cryptocurrencies are not recommended for investments for it is very rare to see improvement in such coins.
Also known as crashing cryptocurrencies, they are the coins that used to be valuable at a time but aren’t anymore. There are chances to see growth in such coins again but it is not likely.
Things To Remember When Investing In Penny Cryptocurrencies
Finding the right penny cryptocurrency to invest can be a hard nut to crack and of course, there are always risks. Read these points to know about what to look for in cryptos before investing and what to avoid.
Why Cryptos Were Created In The First Place?
When you start looking for new cryptocurrencies to invest in, always remember the basics such as crypto coins are supposed to be decentralized and better than the existing payment methods available. If you see the history of some successful crypto coins you’ll find a few things like the motive behind the creation of Bitcoin was to bring a P2P payment system that involves no third party. Ethereum brought more to the blockchain such as the ability to build smart contracts and dApps.
So you see, a good cryptocurrency should offer something new and practical that’s missing from the market right now. Why would anyone want a new payment system that offers nothing more than the existing one?
Learn Everything About The Coin First
Already found the one coin that you think could provide you with benefit? Have you researched it thoroughly? Do not invest in any coin before researching everything about it that includes what technology it is based on, about the company, the team included, read its whitepaper, know what people are saying about it and check out its roadmap. If the coin has a bad reputation or the founders have a shady past, stay away from it. Also, make sure, whether the technology they are talking about is viable or not.
Stay Away From Pump And Dump Coins
There have been many cases in the past when the prices of coins were increased artificially. These kinds of scams are famous in crypto space where companies earn profits by increasing their sales and then run away with profits. When the price of a coin increases all of a sudden, instead of acting right away check the history and observe its price changes for a few weeks. This is the only way you can stay away from the pump and dump schemes. Don’t invest in coins that seem shady or too good to be true.
What Else To Avoid?
- Projects with no or unclear whitepaper.
- The one with no website at all or a website that doesn’t convince you.
- Not much available about the coin on the web.
- Projects with anonymous founders or team members.
- No social media accounts.
Best Penny Cryptocurrency To Invest In 2020
- Ripple (XRP)
- Stellar Lumens (XLM)
- Cardano (ADA)
- Tron (TRX)
- IOTA (MIOTA)
- Raven Coin (RVN)
- QLINK (QLC)
Many of these cryptocurrencies have been around for a while and have gained a lot of attention already like Ripple however others are still struggling to find its place in the market. No matter what penny cryptocurrencies you choose to go with, first, research them thoroughly and compare them with the other competitors. You are putting your money at risk, do everything possible to ensure you won’t suffer loss.