Cryptocurrency, particularly Bitcoin, is everywhere. Nowadays, you would be hard-pressed to find someone in finance who does not know about cryptocurrency. Even those who are not incredibly knowledgeable about finances will likely have a basic idea of what cryptocurrency is. Bitcoin is the dominating type of this new method of payment and investment. Since its inception in 2009, it has seen tremendous success and has become a popular name in the crypto industry.

It is not the only big name, though. Digital currencies like Ethereum and Litecoin, while not reaching Bitcoin’s levels of popularity, are also notable names. The market is expanding with each passing year and many cryptocurrencies – such as those two – are following Bitcoin’s path. While not exactly the same (some even looking to improve issues pertaining to Bitcoin), they demonstrate the impact of Bitcoin.

Beyond these popular names, among several others, very few people know about ‘penny cryptocurrencies’. Going by the name, one can assume that these are cheaper types of cryptocurrency. While there is some truth to that assumption, there is so much more ground to cover to fully understand them.

This article will explain what penny cryptocurrencies are and highlight the best ones you should keep an eye on.

What is it?

Generally speaking, the term ‘penny cryptocurrency’ derives from the stock market, which is essentially investing in penny stocks. A standard penny cryptocurrency, as the name implies, is a crypto coin whose market price is less than $1. As you can probably tell, one can classify a majority of cryptocurrencies that are currently in the market as ‘penny cryptos’.

According to the U.S. Securities and Exchange Commission, any stock trading below $5 per share is a penny stock. It is important to remember that investing in penny coins or trades has the potential to be quite risky. If one is willing to take the risk, and if done correctly, it can prove to bring in huge profits.

It is not unusual to throw around the names and prices of crypto coins in various discussions. However, attention is rarely given to the topic of why these coins have the prices that they do. It appears as though it has become commonplace to interpret Bitcoin as the quintessential cryptocurrency. Moreover, it seems natural to view coins like Ethereum as follow-ups, with everything else following afterward.

The best way to answer why this is the case can stem from the fact that Bitcoin is a unique case. One could make the argument that its price is because of it being the first decentralized cryptocurrency in the world. While that definitely provides some merit, there are actually more factors that tie into it.

Over the years, Bitcoin would go on to reach a level where the coin’s reputation and celebrity status are self-explanatory. Indeed, it has become the staple of all cryptocurrencies in existence. Even from a linguistic point of view, all cryptocurrencies that are not Bitcoin go by the name of ‘altcoins’. In other words, they are alternatives to Bitcoin.

Three categories

Overall, there are three categories to place penny cryptocurrencies into new cryptocurrencies, stagnant cryptocurrencies, and crashing cryptocurrencies. There are a wide variety of cryptocurrency types that could fall into different categories, like tokens or coins that are rising in price. With that said, these three categories should cover a bulk of the main penny cryptocurrency types that you will encounter.

Category #1 – New cryptocurrencies

Before the release of a cryptocurrency, the hype focuses primarily on its Initial Coin Offering (ICO). This is done in an array of methods that relate to marketing, but ultimately, it all boils down to one specific principle. That being the question “Is this cryptocurrency going to be useful?” The price of a new crypto coin relies heavily on its ICO. The success of an ICO, meanwhile, depends on the overall value and usefulness of the coin.

A lot of new cryptocurrencies begin with a substantially low market price. Because of this, it qualifies as being a penny cryptocurrency. Should the coin prove to be useful, the price will start to increase not too long after the initial release.

What should you do to catch one of these penny cryptocurrencies early on? For that matter, what should you do to successfully invest in it? The answer is to keep a close eye on the market and do thorough research on up-and-coming crypto coins. It would be smart to read the whitepapers pertaining to each of the companies and follow the news. Remember to also think logically. Will this new crypto fulfill a specific need? Will it serve a purpose? If so, then it will likely result in a smart investment.

It is important to keep in mind that a new crypto’s price could remain at a low point for a while following its release. This is regardless if it looks to be a coin that holds a lot of promise. The reason for this is typically due to people overlooking it. Similarly, they are not paying enough attention to what it does or what its purpose is.

Category #2 – Stagnant cryptocurrencies

The second type of cryptocurrency that you are likely to encounter is known as ‘stagnant cryptocurrencies’. These particular types of crypto coins are those that have been in the market for a considerable amount of time. However, their individual prices do not fluctuate at all.

The reasons behind this are plentiful and different. Really, it mostly depends on what level you wish to analyze it. There are some situations that may involve corporate interference. There are others that are nothing more than a loss of interest or a momentary pause in trading. It is important to note that “momentary” is a broad term in this context.

Admittedly, this is kind of a difficult type of cryptos to describe. The non-fluctuation nature of their price has the capacity of being both a good and a bad thing. There are two ways of looking at it. On one hand, you may be happy with the lack of a decrease in the coin’s price. One could interpret this as a telltale hint that the crypto holds value and is extensively used. This is even if it is done quietly.

On the other hand, the inactivity of a cryptocurrency can mean that the developers are slowly abandoning the project. Moreover, it could indicate that they are not planning on developing the network that the coin draws from anytime soon. This results in a slow and gradual loss of investment and interest from the side of the user. This, in turn, leads to a sluggish demise for the cryptocurrency.

Category #3 – Crashing cryptocurrencies

Since the start of 2018, it has become a little tricky to explain this particular category. If you take it at face value, it appears to be obvious. Should the price of a cryptocurrency crash, then that essentially means that the coin is likely dying off. As accurate as that assumption may sound, that is not necessarily the case.

At some point during December of 2017, the cryptocurrency market suddenly began to crash as a whole. Up until this point, since the summer of that year to be exact, the price of crypto coins was steadily increasing. For example, Bitcoin came close to reaching the $20,000 mark. Many are predicting that it will reach that mark sometime this year.

In January 2018, following the initial standstill of the price increase and the sudden direction change, the crypto market would crash indefinitely. Almost every cryptocurrency would experience a decline in both price and market value. It was because of this that it was nearly impossible to say “if a cryptocurrency is crashing in price, that means it’s dead.” The market is seeing considerable stabilization lately. Moreover, plenty of crypto experts assure great things will happen in the future. As is, we can only wait and see.

When it comes to penny cryptocurrency investment, this becomes trickier than before. You will need to conduct a great amount of research prior to placing an investment in a coin of this type. Be that as it may, reading a penny cryptocurrencies list will not be enough. You will have to possess enough knowledge of the coin to determine when exactly the price will stop crashing. Only then can you figure out the best timeframe for placing an investment.

Why they are appealing

The vast majority of investors have a tendency to choose large cryptocurrencies such as Bitcoin. And why wouldn’t they? The cryptocurrency’s popularity and liquidity is more than enough reason for them to invest in it. However, the number of investors that are beginning to favor smaller cryptocurrencies is on the rise. This is mainly because these cheaper cryptocurrencies only cost pennies to invest in. And it is because of the cheapness of these smaller coins that they have huge growth prospects.

Overall, penny cryptocurrencies are an exceptionally high-risk investment. However, if we have learned anything from history, they have the potential to be lucrative investments. Ripple (XRP) and Stellar Lumens are two notable examples of penny cryptocurrencies that climbed up the ranks over time. Nowadays, they are huge players in the market, giving the bigger names in crypto some competition.

There are others who would rather invest in penny cryptocurrencies because they may not have a lot of money to invest with. For them, opting to invest in a cheaper coin is the best option. Whatever the reason or motivation is for their decision, there is a noticeable increase in people looking to invest in more obscure coins.

The best ones to pick

The main takeaway from this is if you are looking for cheap cryptocurrencies, then penny cryptos are for you. There are over 2,500 cryptocurrencies to invest in, so you certainly have a wide variety of options to choose from. However, deciding on the right coin can be a daunting task. You will need to do a good amount of research on them because all cryptocurrencies are not equal. For that matter, not every coin will turn a profit.

With that in mind, let’s go over some of the most promising penny cryptocurrencies. Ones that you should keep an eye on this year and beyond.

1 – Ripple (XRP)

Out of all of the penny cryptocurrencies on this list, Ripple is arguably the most popular of the bunch. “Ripple” is technically the company that is responsible for the creation of the coin, which goes by the name of “XRP.” However, everyone associates the name Ripple with the coin anyway.

Ripple sticks out from the crypto crowd, being the only centralized cryptocurrency to reach the top of the market. When at its peak, Ripple was able to nab the #2 spot in the CoinMarketCap. As a result, many were starting to see it as potentially becoming the “Bitcoin killer”. Of course, this would never come to pass. However, Ripple currently has the #3 spot, trailing behind Ethereum.

There are a number of reasons as to why people love Ripple. A few of the key ones include the following, among several others:

• Speed (especially in comparison to Bitcoin)
• Scarcity
• Longevity
• The team responsible for the development of the coin
• Fluidity
• Many banks and governments around the world accept it

For many people, Ripple is among the best penny cryptocurrencies to invest in. This is especially true if you are a novice in the world of investment. Some of the penny cryptocurrencies lists that you find will often reference Ripple as the most popular penny crypto.

2 – Cardano (ADA)

Cardano is quite an ambitious project. Those behind its development are some of the most knowledgeable experts in crypto, hailing from all over the world. Its main intent is to improve cryptocurrency scalability and make transactions much faster. Moreover, they hope to completely revolutionize the way in which cryptocurrencies work.

Cardano was successful with the implementation of the proof-of-stake (PoS) algorithm into their systems. This basically means that you are unable to mine Cardano. Instead, you can stake your coins and validate the transactions that other Cardano holders carry out within the blockchain. You will receive a share of the revenue afterward. However, it largely depends on the amount of ADA coins that you are staking.

When you compare this coin to others on this list, it receives comparatively less attention. However, many crypto enthusiasts and experts still view Cardano as one of the most promising projects out there. Very few penny cryptocurrency lists forget to include it as a coin that people should keep a close eye on.

3 – Stellar Lumens (XLM)

Stellar Lumens falls under $1, though it is not technically a small-cap cryptocurrency. Be that as it may, it is still a decent choice. Especially if you are someone who is looking for a cheap cryptocurrency to invest in this year. It has one of the largest market caps out of all cryptocurrencies that are in circulation. It is because of this that XLM holds a lot of potential pertaining to growth.

This cryptocurrency functions on increasing the speed of the payment and decreasing the costs of cross-border transactions. Serving a market that generates multi-trillion dollars per year, it is one of the ‘leading’ cheap cryptocurrency to invest in. At the time of this writing, XLM ranks as the 12th largest coin in terms of market cap.

4 – QuantStamp (QSP)

QuantStamp is widely regarded as the first scalable security-audit protocol that unearths the security loopholes in constructing Ethereum smart contracts. A recurring fear of cryptocurrencies and blockchains is hackers, not unlike the DAO attack in May of 2016. During this unfortunate event, up to 3.6 million ETH were stolen by hackers.

QuantStamp provides a monthly Airdrop consisting of an array of brand new coins to long-term investors. It sounds very appealing for investors to copious amounts of profit by investing in QuantStamp. It has already reached its lowest price. This occurrence was because of the Ethereum scalability issue that drags the value down. Therefore, many see it as the best cryptocurrency under $1, as well as a chance for investors to receive benefits.

5 – Qlink (QLC)

Qlink is, in a way, a special entry. It is the first decentralized mobile network service to appear in the world. The company’s creators aspire to completely remove old-school mobile networking frameworks. They plan to do this by presenting a brand new peer-to-peer system.

One of the primary ways in which people can earn QCL tokens is by sharing their WiFis with other Qlink members. This will effectively facilitate the overall usage of the service. The company would also introduce decentralized SMS messages to their platform. Do you have an abundance of unused SMSs? If so, then you can easily sell them off for extra earnings.

The Qlink company is, of course, the first of its kind. Therefore, it is no surprise that it goes through an array of difficult hurdles that prevent their project’s success. However, they are persistent and are gradually moving forward. The project is certainly no stranger to heavy development. It’s because this service is so beneficial to a lot of people around the world that the coin holds promise.

6 – IOTA (MIOTA)

Blockchain technology is the main driving force behind IOTA. The IOTA Foundation is a German non-profit organization that was overseeing the IOTA virtual currency. It was also responsible for the launch of its Data Marketplace for a two-month demo during 2018. IOTA’s Data Marketplace is a setup that permits companies to sell data as a way to encourage data sharing.

In addition, this marketplace is entirely blockless. Conducting any transaction on the network is free. This, as a result, effectively solves one of the biggest restrictions pertaining to transaction fees in blockchain technology. Nowadays, it has a place among the best cryptocurrencies that are below $1.

7 – Ardor (ARDR)

Ardor runs its operations on the ‘Blockchain as a Service’ (BAAS) business model. This, above all else, is the reason why many companies wish to invest in it. However, the fact is, blockchain is an incredibly complex piece of technology. The entry barrier for a majority of businesses is unbreakable. Ardor sets out to provide businesses with the ability to effortlessly incorporate blockchain into their operations. This is definitely an altcoin to watch as it could potentially service millions of different businesses.

8 – NEM (XEM)

NEM is an acronym for the ‘New Economy Movement’. It is a smart asset system through which companies can develop their business platforms. It provides a system that allows for the construction of decentralized applications (DApps). The best way to look at it is like the Apple app store. It is a place where others can build upon pre-existing systems. It is a coin that has the potential to offer good returns in your crypto portfolio.

This peer-to-peer platform offers a ‘Messages’ feature. It includes a transaction that can be useful for securing communication and multi-signature transactions. Ones that provide protection for users to keep hackers away and secure community funds.

9 – Ravencoin (RVN)

Ravencoin is a token that is still in its infancy, having only been launched in January of 2018. The inspiration for Ravencoin came from Game of Thrones, especially in regard to the continent of Westeros. Ravens were a common method of sending statements of truth from one party to another. Ravencoin works in a similar fashion. Its design allows it to carry a “statement of truth” to the owner of the asset.

Indeed, this is a coin that holds an excessive amount of potential for success. It is for this reason that the CEO of Overstock would go on to invest millions of dollars into it. TokenizEU even chose the Ravencoin platform for its upcoming assets.

10 – BitTorrent (BTT)

BitTorrent is one of the oldest cryptocurrencies but is also among the most popular. Its circulation occurs in over 138 countries and over the years it has captured 22% of total upstream traffic. More than 100 million users are able to trade in BTT on the regular.

BitTorrent gives content developers a way to connect with their audience. What’s more, it allows them to earn and spend digital currency without a third-party entity. A new endeavor between BitTorrent and TRON (TRX) will likely prove to be lucrative for investors and traders alike.