Penny Cryptos Of 2021
Today, we’re talking about the what’s what of Penny Crypto Currencies.
Penny cryptocurrencies are similar to the idea behind penny stocks. Just as a disclaimer: cryptocurrency is in no way shape or form related to a stock. People new to crypto can take the idea behind a penny stock and apply it to penny cryptocurrencies. Penny cryptocurrencies are essentially what their name suggests; they are coins under $1.
There are different types of penny cryptocurrencies: 1) large supply coins, 2) brand new cryptocurrency (think dogecoin or bitcoin circa 2015), 3) coins that were up but have since fallen, and 4) cryptos that have never taken off. We aren’t going to focus on the last one because the reason these currencies might not have taken off is because they are not listed on an exchange. Us newbies are most likely frequenting exchanges, so we need to focus on what we can get our hands on. These exchanges are likely Coinbase, Binance, etc.
One of the most important things to understand, is market cap, volume and circulating supply. If you haunt the cryptocurrency sub-reddits like me, you likely have seen the words market cap and circulating supply. If you’re also like me, you scroll right on by because what you don’t know doesn’t hurt you, right? WRONG. Very, very wrong. Market cap and circulating supply can be our first indicator of a successful coin – NOT ALWAYS – but these are concepts that we, as newly minted crypto investors, must understand before we dive further into this.
First, market cap tells us the size of the particular cryptocurrency. You may be sitting there thinking: “Wait, I thought these were digital coins? How do they have a size.” The market cap is not the physical size of the cryptocurrency but rather the circulating power – is there movement behind this particular cryptocurrency project? I find it easiest to think about each individual coin as a small project put out by a company or individual.
At the end of the day, the market cap can be used to give you an idea of the risk involved with a particular coin. A smaller market cap means there is room to grow but the coin is more volatile, and a large cap means there is a little less room to grow but the coin is more stable. For example, if you look at the market cap of Dogecoin vs Bitcoin, Doge has a market cap of $63.7 billion and Bitcoin has a market cap of $892.6 billion. What that tells us is that Dodgecoin is extremely risky and volatile, and it doesn’t have as much support behind it as bitcoin – makes sense right? Great! If not, that’s okay, investing in crypto is like learning a new language; keep at it, and it will click eventually!
Next, let’s look at volume. Volume tell us how many coins have been traded in the last 24 hours.
Lastly, lets consider circulating supply. Circulating supply is a less convoluted topic to understand. It simply reflects how many coins are out circulating in the market. There are two things to consider when looking at the circulating supply: 1) total supply – the number of coins passing between hands right now. 2) Max supply – the max number of coins that will exist, ever. Put simply, circulating supply is classic supply and demand.
Writers note: You can memorize these definitions but what is most important is the idea behind the project and finding a project you believe in. Simply looking at these numbers won’t make you a millionaire or savvy crypto investor. Since we’re newbies, it’s important to understand the whole picture, but no number is a substitute for your passion and support behind a particular project. Invest in what you’re excited about!
It is important to remember that cryptocurrency is relatively new, none of this advice or the advice of anyone else on the internet is set in stone. Take these concepts and start forming your own opinions about what a good cryptocurrency is. Use these as your training wheels if you will. As you become more knowledgeable and start to understand crypto currency better, you will start to form your own opinions about what coin is a worthwhile investment and whether the market cap and circulating supply of a particular coin is worthwhile.
Now, that we have some basics and lingo under our belt, let’s look at some penny coins. A penny cryptocurrency is a good place for new people to start because it is relatively low risk. READ: it is still risky, but it doesn’t cost as much as a bitcoin or an Ethereum to have a substantial stake in the coin. Penny cryptocurrency are good for new investors because you can learn the ropes of the market without spending large sums of money – you’ll start to learn how volatile the market is and how coins fluctuate throughout the day without the added pressure of your life savings in one coin.
My advice: log on to your favorite exchange and start to get familiar with the platform. Take a look at the coins, google ones that stand out to you and start reading about the project and what the coin is all about. For example, my chosen exchange is coinbase. Now, veteran crypto investors might have a lot to say about my choice of exchange but as a new investor, coinbase was easiest for me to understand and navigate. The first coin I ever bought was Ripple’s XRP. Why? Because it was under $1.00 – at the time it was .29 – and I liked the name. I did a little research behind the coin and it seemed solid to me; you can do research on google and reddit, to learn more about the project. I put in $40.00 and let it sit. Now, XRP is at $1.44 and I more than doubled my investment. Will that happen every time? NO, absolutely not. But, the bottom line of this story is that crypto does not have to be intimidating.
My first initial investment in penny cryptocurrency was exactly what I needed it to be: a learning tool. I was able to get a feel for the volatility of the market and start to understand that “HODL” concept all the redditors use. For those that were as clueless as I was about what HODL means – there is a whole back story you can find on reddit, it involves alcohol – HODL essentially means hold through the dips, don’t sell because your coin dropped 50% that day. I wouldn’t have understood that concept or the importance behind “HODLING” if I’d started with an expensive coin and a lot of money. Simply because I would have pulled that money out as soon as the coin started dropping.
Now for what you all have been waiting for: the top five penny cryptos of 2021.
In making this list, I am going to employ the tools we’ve already discussed. All I am going to do is log on to an exchange (a lot of penny crypto’s are not supported by coinbase, so you will need to find another exchange service), look for coins under $1.00, then I am going to look at their market cap, volume and circulating supply. Next, I’ll do a little research into the coin and then I’ll put in $10.00. I’ll report back here in a few months to see how well we did. I hope you report back too!
Stellar Lumens – XLM
Market Cap: $15.9 Billion
Volume: $3.9 billion
Circulating Supply: 23.1 Billon.
Project synopsis: connects banks, payment systems and individuals quickly and reliably. Stellar has forged quite a number of partnerships that could expand stellers reach.
VeChain – VET
Market Cap: $11.3 billion
Volume: $1.6 billion
Circulating Supple: 64 billion
Project synopsis: Vechain was developed to assist small and large business with supply chain management. VeChain is equipped with anti-fraud technology that ensures customers purchases are authentic and builds industry trust for retailers.
Dogecoin – DOGE
Market Cap: $64.8 billion
Volume: $11.3 billion
Circulating Supply: 129.6 billion
Project synopsis: This coin was created as a joke. I only include Dodge due to the public conversations that surround this coin. There is no use *yet* for Dodge, but if you want to join in on the moment and get a feel for the market throw $10.00 in and see what happens.
Hedera Hashgraph – HBAR
Market Cap: $2.5 billion
Volume: $662.1 million
Circulating supply: 8.3 billion
Project synopsis: HBAR is green crypto! I’m sure many of you have heard the Tesla stopped accepting bitcoin because it was bad for the environment. HBAR is a green crypto currency that has a lower bandwidth and uses less energy. HBAR has some notable owners and partners such as Google, IBM, Boeing and LG. We see you corporate America, we see you.
Ravencoin – RVN
Market Cap: $1.2 billion
Volume: $245.1 million
Circulating Supply: 245.4 million
Project Synopsis: Ravencoin enables instant payment to anyone in the world through the creation and transfer of tokens that represent real-world assets such as securities, event tickets, airlines and anything you can think of.
This list is not exhaustive and is a representation of my own personal opinion, but it this should give you an idea of where to start researching penny cryptos or even what coins to start investing in to get your feet wet in the market. Remember: use common sense, don’t invest what you can’t afford to lose and HODL!