10 July 2020
Penny Cryptocurrencies - as the name suggests is a crypto coin whose market price of worth $1 or less. Of course, not all the cryptocurrencies fall under this category but penny cryptocurrency in a way can be classified under categories too such as Newly Minted Cryptocurrencies, Plentiful Cryptocurrencies, Stagnant Cryptocurrencies, and Fallen Cryptocurrencies. All the categories should be treated differently even if they fall under the main subject. Because even if the cryptocurrencies are similar to penny stocks they are yet subjected to manipulation and are very volatile. But even if having a risk factor there is also a possibility just like Bitcoin or Ethereum that a penny cryptocurrency could turn from as low as $0.1 to $20 in hours. The thing that is important is to choose the right cryptocurrency to invest that includes a massive amount of well in-detailed study but along with is the risk that involves.
Category classification of Penny Cryptocurrencies and its category classification
- Newly Minted Cryptocurrencies: It is basically a new cryptocurrency and the key component here is to research and learn about the new promising and potential cryptocurrency in the market. Also, the prices of the new cryptocurrencies are pretty low so it could initiate a good head start if the study is conducted well, one could also learn a lot from the whitepaper of the cryptocurrency.
- Stagnant Cryptocurrencies: These are the coins that have been in the market for quite some time without making any headway in the market. This cryptocurrency has been in the market in a considerable amount of time and if it has not received any attention as such in the market it is very likely that it will not progress or have any growth but also there is a possibility that sometime a coin might create hype before any symptoms of one. Thus it is very important to pay keen attention to such coins if one has invested.
- Fallen Cryptocurrencies: This falls under the category where a cryptocurrency was worth a lot in the market and later declined dead. Even though there could be a minimal chance for it to boost but that is very unlikely to happen and investment in such a coin is a huge risk too. Fallen Coins are also referred to as Crashing Cryptos.
- Plentiful Cryptocurrencies: As the name suggests, it is a cryptocurrency that is large in supply and can also be stated as a good investment because of the possible factor that the more the supply the stable the prices and mostly down.
Also Read, What Are Currency Tokens?
Penny Cryptocurrencies and its examples
- Ripple (XRP): This cryptocurrency has been in the market since 2012. It is a payment system that works with banks and other financial institutions and it is backed by Blockchain technology. It is a platform that is designed to enable the peer-to-peer transfer of the assets. According to CoinMarketCap, Ripple is said to be the third-largest digital asset.
- Basic Attention Token (BAT): This coin has a lot of potentials and is pretty known in the market. BAT ventures to strive by decluttering the web by the removal of the intrusive advertising basically trying to eliminate the intermediaries by raising awareness for the Brave web browser and it is open-source.
- Ravencoin (RVN): This coin was launched in the year 2018 and its protocol is based on the Bitcoin code’s fork. The community of this coin is enabled for their tokenized assets to be transfer, issue, and track.
More about Penny Cryptocurrencies
Investing in cryptocurrencies in any form can either be lucrative or a high loss. It is subject to risk in all its forms especially when the market is low volatile. One has to have a mindset that money once invested may or may not come back as expected. It is that the investor does not use its saving to gamble in crypto trading.
However, listed below are a few things one can consider:
- Research about the cryptocurrency that one is planning to invest is of immense importance. It is necessary to study the background and whitepaper of the cryptocurrency.
- It is also necessary to learn and understand the technology that one is planning to invest in. To know the strength, weaknesses, and fallouts of the subject.
- One has to be updated and alert, known the news and trends of the market and related.
- Timing is also of the essence in the crypto world because the market is volatile, the investor should stay alert on when to cash in or cash out.
The reasons to invest in penny cryptocurrencies could be anything from an investor either having too much money to invest in everything or it could for an investor to head start with a small amount for investing at the beginning. What one needs to understand is that penny cryptocurrencies are very volatile and no matter what one reads or listens from the source it is a golden rule that one should follow is to always conduct their own research.
As Benjamin Franklin said, “An investment in knowledge pays the best interest.”