Penny Cryptocurrencies: Which are the Top ones to Look Into in 2021?

Handy Tips / 05.03.2021

The majority of crypto traders choose to go for large digital coins by market cap such as Bitcoin, Ethereum, or Litecoin due to their popularity and high liquidity. However, these top coins are often costly, meaning that most folks can only afford to purchase a fraction of BTC or a couple of Ethers.

The good news for investors looking to cash in on the crypto boom is that they can find other promising and cheaper altcoins

The best pick for individuals looking to start small or who don’t have a lot of capital is penny cryptocurrencies. Much like penny stocks, the penny cryptos are very cheap coins worth less than $1.

This comprehensive guide looks at various aspects of penny cryptocurrencies that make them attractive and analyze 5 of the most lucrative and undervalued coins to make for a worthwhile investment in 2021. 

Why Are Penny Cryptos Attractive?

Although they rarely attract most investors’ attention, penny cryptocurrencies currently account for about 35% of the total digital assets market.

Besides the low cost of entry, penny cryptos are gaining more popularity because their affordable prices drive volatility and upward impetus, making them a rewarding investment for the long term. 

More crypto traders are starting to put their money in this category of smaller altcoins that only cost pennies because they have massive growth and profit prospects.

Cardano (ADA) and Chainlink (LINK) are prime examples of digital coins that started as penny cryptocurrencies but have climbed up the ladder to become top players in the crypto space.  

Many investors are looking to enter the budding crypto market but may not have a lot of money to invest. In this case, some of the more obscure coins currently available can make for the best investment choices.  

Categories of Penny Cryptocurrencies

Affordable altcoins valued at under 1 USD can be categorized into three classes:

New Cryptocurrencies

The crypto sector continuously sees new entrants that claim to bring something unique and exciting to the industry. Multiple projects have so far held their initial coin offerings (ICO) or Initial Exchange Offering (IEO), allowing early investors to put money into a specific crypto venture.

While determining which new market entrant to invest in, be sure to read their white paper and understand their potential use cases in the real world. The underlying tech of any crypto asset will determine its true potential. For instance, up until recently, XRP showed great promise right from the onset due to its application in powering cross-border payments for Ripple.

For the avid investor who takes time to examine emerging projects, an investment in a digital coin/token while still a shitcoin can help them stay ahead of the pack.

Stagnant Cryptocurrencies

These are crypto-assets that have been in the market for quite some time whose prices don’t fluctuate at all. That stagnant price action could make the lucrative coins investments, as it indicates that they are still valuable and used to some extent since their prices have not crashed yet. 

The key to determining which stagnant penny crypto to invest in is to closely study market trends to determine the project’s level of interest

One crucial market criteria to look out for in this category is trading volume and market cap. For stagnant penny crypto to be a worthwhile investment, it must have a market cap of more than $20M and a daily trading volume of at least $1M. 

Be sure to also look into stagnating coins that have maintained a strong presence on social media, as that would indicate that dev teams and users aren’t quietly abandoning the project. 

Crashing Cryptocurrencies

These are digital coins/tokens that used to be worth a lot in the market but took a dip in price due to changing market dynamics. 

Although it is easy to dismiss this category, always remember that even booming cryptocurrencies like bitcoin and Ethereum have experienced tumultuous price action in the past before rebounding. 

Therefore, just because a particular coin is crashing in price doesn’t necessarily mean it is done. Before considering any penny crypto in this class, investors should first gather enough information on the coin to predict when it will stop crashing.

Some of the vital requisites for a crashing altcoin that may soon recover include:

  • A supply of 10M+ coins (25% mined)
  • A team of experienced and committed blockchain developers

Best Penny Cryptocurrencies in 2021

The crypto market is flooded with a wide array of cheap altcoins, and so picking out the best crypto assets to invest in can be quite daunting.

Investors should single out penny cryptos that will progressively grow in market cap over the coming months and years. The best coins/tokens under $1 are listed on top exchanges such as OKEx, Binance, Huobi Global BitMex, etc. 

Let’s analyze the top 5 picks you can buy now to rake in lucrative gains in 2021 possibly.

Stellar Lumens (XLM)

XLM, the tenth most valuable cryptocurrency as per CoinMarketCap rankings, is the native coin of Stellar, a blockchain platform that focuses on remittance and cross-border payments.

What makes this project a highly lucrative investment is the promise it holds in establishing an open-source financial system that grants folks in developing markets access to low-cost financial services. These services include micropayments, mobile money, and mobile branches. 

Furthermore, users can conveniently exchange their digital funds into other crypto assets or fiat via the Stellar network’s powerful Distributed Exchange.

The project facilitates quicker and cheaper transactions than most of its rival blockchain-based remittance systems. One XLM coin is currently trading for $0.43, with the blockchain project boasting a market cap of well over $9.7 bn.

Zilliqa (ZIL)

Another contender for the best penny cryptocurrency of 2021 is ZIL, the native coin of Singapore-based project Zilliqa, working to tackle scalability in the blockchain space. 

The coin is ranked #52 on CoinMarketCap at its current market cap of $1.41 billion. One ZIL coin is valued at $0.13 as per data from crypto data aggregator CoinGecko.

ZIL established itself as one of the hottest coins of 2018 after it became one of the first projects to harness the power of sharding as a scaling solution.

The project is unique because it isn’t a generic fork like many other altcoins; instead, the dev team behind it has managed to build the exceptional Scilla programming language and deploy sharding technology.

Zilliqa’s efforts to tackle the most significant pain points for blockchains via its scaling solution that can be implemented on other networks prove the project’s value in the industry.

VeChain (VET)

Vechain currently has a market price of $0.49 and a market capitalization of $3.13 billion, according to CoinMarketCap. The project, managed by the VeChain Foundation, is an enterprise-level public blockchain that has various use cases in logistics, healthcare, and the automotive industry. 

Other use cases are in luxury fashion and even in hi-tech internet of things (IoT) solutions. The project also boasts of higher scalability solutions suited for enterprise and sidechain capability.

Vechain has so far established multiple strategic partnerships with enterprises across the globe, including Yida China Holdings Limited, DNV GL, PriceWaterhouseCoopers (PwC). 

The dedicated team behind VET is currently working on expanding the VeChainThor ecosystem, meaning that the project has lots of room to grow.

Basic Attention Token (BAT)

The BAT token is also one of the most sound projects in the entire crypto space this year. The token’s low price and excellent use cases in digital advertising make it one of the best bets for crypto investors looking to cash in on penny cryptocurrencies. 

Brave browser rewards over 25 million active daily users with BAT tokens for viewing ads. The privacy-protecting browser recently announced the rollout of version 2.0 of its browser that plans to integrate a host of innovative features and DEX. 

This development is expected to attract more users and create more utility for the BAT token (currently valued at $0.79).

Final Thoughts

Investors should make the prudent decision to diversify their portfolio into different promising digital coins/tokens instead of putting all their money into one popular crypto like BTC. 

Penny cryptocurrencies are emerging as a top choice for most investors, as there are many hidden gems in this category that hold high-profit potential. 

However, before putting your funds into any penny crypto, be sure to study its underlying tech; its possible utility and solutions determine any digital currency’s true worth. 

It is also essential to keep in mind that just like penny stocks, this category of affordable crypto assets is subject to price manipulation and has a high degree of volatility.

Adam is an outgoing young lad who likes adventures and discovering new things. Despite his boring life, he loves writing about cryptocurrencies and exploring what blockchain technology can do for the coming digital world where all adventures will be virtual.