Today i am going to talk about cheap altcoins known as – penny cryptocurrencies.
Investing in cryptocurrency is a form of new investment opportunity for elite investors, and it has actually made lots of individuals very rich recently.
Getting involve in the cryptocurrency world, you will see so many crypto coin projects aside bitcoin, ethereum and litecoin, but you haven’t known why some of them are valued under a dollar in the crypto coin market capitalization.
There are plentiful of cryptocurrencies which makes up the crypto market capitalization, but not all of them are bound to last, or remain valuable for a long time.
Known cryptos like, BTC and ETH are categorized as most valuable coins followed by LTC, because they have stood test of times, and also garnered much value within time as well.
Popularly, many coins have emerged so far, to make up the entire crypto market, and there’s nobody that haven’t heard of the most popular projects, but you yet, many might’ve not heard of penny cryptocurrencies.
Now, let’s get started with digging deep into the meaning of penny cryptos. I guess you are ready… so let’s get started.
What is a penny cryptocurrency?
In simplest words, penny cryptocurrency is any crypto coin that its market price is valued under $1 – which is not up-to the value of other popular cryptocurrency coins like; BTC, ETH, LTC etc.
If you’re an avid investor of cryptocurrency, you ought to know that investing in new crypto coins can increase your profit margin, but at the same can lead to heavy losses.
However, penny cryptocurrency price values are very volatile. That’s to say, you can make huge percentage of crypto income, or sustain huge lose – especially when the market movement is not fully monitored.
To invest in penny cryptocurrencies, you will need to do thorough research, and also use fundamental analysis alongside your technical analysis (if you’re a cryptocurrency trading professional).
As the cryptocurrency world is full of scams, you will need to look for sneaky moves to avoid loosing your financial investments in the fake coin market.
Who invests in penny cryptos?
If you are wondering who would like to invest in such cheap cryptocurrency coins, i would say that most wealthy personalities that can afford to loose almost 100% of their investment in the penny cryptocurrency are the ones that mostly invest in such coins.
They know the potentials, so they got a far mile in learning the way to get into the penny cryptocurrency market, and also get out of it if the condition and target is no longer favorable enough.
Penny cryptos vs Penny stocks
In the real sense, there’s no difference between penny stocks and penny cryptos. Since bitcoin is popular and an already established coin, then penny stocks in the crypto world would be those penny cryptocurrencies.
Simply put it this way, penny cryptos are like penny stocks – there’s no difference at all.
Penny stocks are stocks that their market value is very cheap, while basically, penny cryptocurrencies are direct equivalent of these the penny stocks, but in cryptocurrency world, they’re known as penny cryptos.
They‘re those cryptocurrency coins that are very cheap in price, and you can buy them with very little amount of money. They cost cents in price.
Categories of penny cryptocurrencies
All the cheap altcoins known as penny cryptos are not all the same when it comes to classification. Many of them can be manipulated in price value, so below you will see how they’re been categorized according to their volume and worth.
Newly minted cryptos
These are cryptocurrencies that newly got into the market, and are very volatile and risky for beginner investors. I suggest you avoid such cryptocurrencies, because they’re mostly used for practicing Pump and Dump in the crypto space.
Plentiful crypto altcoins
They are cryptos that their market volume supply is very high, and that’s why they’re the cheap alternatives to the next big cryptocurrencies, or well established crypto-coins like; BTC, ETH and LTC.
These are crypto projects that remained stagnant in market value because they never got expected popularity, or adoptions like other cryptos into an exchange like Binance.
Fallen crypto coins
This category of cryptos are those cryptocurrencies that use to have high value, but later on they took heavy dip and lost most of their value, thus being undervalued.
How to make money trading penny cryptos?
Penny cryptos are a good way to earn some extra cash with very little capital. You don’t have to put in a lot of money to invest (unless you’re willing to take big risks).
To make money trading penny crypto (or cheap altcoins), you must have created an account on Binance. The crypto trading platform is one of the biggest, and fastest growing exchange since 2017 till date.
They are trusted, and they also have huge volume of crypto coins on the platform.
If you have firmly decided to invest in a penny cryptocurrency, the next step is to look for specific penny cryptos to invest in. Always make sure to research on them to know their potential in future.
How to buy penny cryptocurrencies
As i am a fan of buying a stablecoin, or popularly cryptocurrency first before investing in penny crypto coins. If you would want to know how i go about buying penny cryptos, then follow my steps below:
- Buy either Bitcoin, Ethereum, Litecoin or Binance (BNB) from CoinSwitch
- Create an account on Binance, and transfer the coins you bought to the crypto trading platform
- Explore the binance cryptocurrency marketplace, then buy any penny crypto of your choice.
Just like they say; “Don’t put all your eggs in one basket”, i will also let you know that investing huge sum of money in penny crypto is a very big risk.
Penny cryptocurrencies can make someone very rich in 24 hours, but can also drain someone in an instant. For example, you invested in 10 penny cryptos, and two of them increases in price value, while the rest got undervalued.
If you had most of your money in the ones that gained price value, you will make huge returns on investment. But now, let’s assume most of your money was invested in those that where undervalued, you will loose a lot of money.
Advice: Always investing in penny cryptocurrencies with a pinch of salt grains. And don’t invest more than you can afford to loose if the market value should go against your favor.
How to store penny cryptos
Penny cryptos can also be stored just like all other cryptocurrencies. I always advice individuals to avoid storing their cryptocurrency investments in an exchange wallet to avoid lose due to hack or theft.
To buy penny cryptocurrencies or not?
Now that you know all about penny cryptos, you may be wondering if investing in them will be worth it or not. They can be worth it but you still have to understand all the risks that come with it.
Just like penny stocks, putting a lot of money into penny cryptos is a huge risk. That doesn’t necessarily mean that penny cryptos aren’t good crypto investments, because they can still earn you a lot of money.
If the fundamentals of certain penny crypto are good then they can definitely be good bets. Just like penny stocks, all you have to look for is a small increase in your investment and that’s considered a big win already.
If you’re looking to invest in penny cryptos, you have to be willing to lose money in the process. That’s why it is always necessary to only invest sum of money you can easily loose in-case of unforeseen circumstances.
There have been a lot of misses in the past, but there is real money to be made with penny cryptocurrencies, you just have to take the risk, and also put more time in doing fundamental jobs like research before investing in any of them.
There’s nothing wrong with investing and then bailing. There’s also nothing wrong with taking a chance and holding.
If you’re planning on investing, be sure to keep a clear head so you don’t make any mistakes you’ll regret in the future. As with all kinds of investments, it’s really up to you and how willing you are to take a leap of faith.
I hope this beginners guide helps to make better choice… Goodluck.