Take a look at the penny crypto assets and observe how to trade crypto via the penny crypto strategy to have the biggest benefits within the short-term run.
Read the article till the end and you will dig out all the most significant details!
5 Top Penny Cryptocurrencies to Invest in 2022
Distinctive features of the digital finance market are strong volatility and unpredictability. Most cryptocurrencies (with the exception of stablecoins) are characterized by high volatility.
If we take into account the fact that at the beginning of December 2021, more than 12K different altcoins are listed on the exchanges, then the question of where exactly to invest money can be difficult.
1. Siacoin (SC)
The internal currency of the platform of the same name, which was developed for the safe and confidential placement of data in the cloud storage. The project started in 2013 and since then it has been constantly developing.
The SC token shows a slow but steady growth in value. Examining the charts of price changes, we can distinguish 2 periods when the rate rose sharply, and then decreased at the stage of correction (January 2018 and April 2021).
However, analysts attribute these jumps not to the instability of the coin, but to the general growth of the cryptocurrency market. Therefore, Siacoin can be considered as a reliable investment asset.
For 2 years, the price of the coin increased 10 times—from $0.0016 to $0.016
2. Verge (XVG)
The coin, the main priorities of which the developers call anonymity, speed of transactions and ease of use.
The project was launched in 2014 and was called DogeCoinDark. But after 2 years, the organizers carried out a rebranding (so that the coin was not associated with DOGE) and XVG appeared.
The altcoin blockchain was based on the Bitcoin distributed ledger code, into which the following technologies were integrated: Wraith Protocol, SPV (atomic swaps), i2P, and the TOR encryption scheme.
The confidentiality of asset transfers is only a means to the main goal—to make the use of cryptocurrencies an ordinary public thing.
So that blockchain technology can be freely used not only by programmers and stock traders, but also by ordinary people in everyday life. Over the past year (as of October 2, 2021), the value of the coin has increased 5 times—from $0.004 to $0.02.
3. Tron (TRX)
TRX positions itself as an environment where content creators can communicate directly with their audience.
By eliminating centralized platforms, be it streaming services, app stores, or music sites, the cost of content to users will be lower because it does not include intermediary fees.
Given that the entertainment industry (online games, movies, music, visual arts, social networks) is rapidly digitizing, the project ideas are finding more and more followers and active customers.
With the growing popularity of altcoin, its prospects as a financial asset also increase.
Therefore, now analysts see TRX not only as a means of payment for author’s content, but also as an investment tool. And its price has increased 4 times over the past year—from $0.046 to $0.094.
4. Lumens (XLM)
Native coin of the Stellar platform. The interests of the project lie in the financial sphere. It brings together payment systems, banks and private users.
The main function of an altcoin is a quick transfer of various types of monetary assets with simultaneous conversion and a minimum commission (a kind of universal exchanger).
It is also possible to issue new tokens on the Stellar blockchain for the initial coin offering. As of early October 2021, XLM ranks 25th in terms of capitalization, and its price has changed from $0.07 to $0.31 over the past year.
A new cheap cryptocurrency with growth prospects, a utility token of the popular SafePal hardware wallet. This coin is allowed to pay a commission for transactions and trading on the platform.
Also, token owners can receive rewards for staking coins and have the right to vote on the development of the project.
Best Strategy to Invest in Penny Cryptocurrencies
Similarly to the penny stocks strategy, it can be applied to trading penny crypto assets.
The attraction of this category of shares is that for many investors it does not take much money to buy a large block of shares.
Buying large blocks of shares at once leads to increased volatility. Increased volatility is an opportunity to either earn well or lose well.
Here, within this strategy, be sure to stick to a set of pieces of advice by Exness Forex Broker:
- If you are new to trading penny cryptos, then never short them. Stocks of cheap companies are too volatile. It is not uncommon for a Short Squeeze to appear, in which you can lose most of your capital.
- Choose stocks with an average volume of at least 100,000 shares per day. With less trading volume, getting out of a position can be a problem.
- Do not trade more than 10% of the stock’s average daily trading volume.
Trading in penny crypto is considered high-risk. This asset has too low liquidity, and the investor risks, if the issuing company shows signs of a crisis, to find itself in a situation where there will simply be no one to sell them to.
The penny cryptocurrencies market attract scammers. The absence of strict requirements for the financial reporting of the issuer allows issuing shares to companies that do not aim to develop business, but want to benefit from investors’ funds.
The low cost of shares allows the investor to collect a well-diversified portfolio without large investments.
In general, trading Penny cryptocurrencies can bring an investor a good profit, if you approach the purchase wisely and be able to wait for the optimal moment to sell penny stocks.