Are penny cryptos worth investing in?

Are penny cryptos worth investing in?

Much like penny stocks, penny cryptos are cryptocurrencies that trade at less than $1. Some also might consider penny cryptos, those which trade at $5 or less.

Everybody who gets into the crypto market is eager to make huge profits. But not everyone has thousands of dollars to start with, and because of that, they are not able to invest in already well-established cryptos, such as Bitcoin and Ethereum. This is where penny cryptos come into play. 

Things to Know About Penny Cryptos

  • Penny cryptocurrencies are considered tokens that are worth less than $1 or $5
  • They can generate good profits, but the likelihood of that happening is low 
  • There are multiple types of penny cryptos, each needing a different approach
  • Penny cryptos usually have big supplies

Should We Invest in Penny Crypto?

If we ask any person, what would they do if they had a time machine, one of the most common answers would be, "I would go back into the past".  If we then ask them, “what would you do in the past?” they would probably answer that they would go and buy a bunch of Bitcoin when it was still worthless. 

No one knew that Bitcoin would be worth this much and following that example, a lot of traders are now looking and trading different penny cryptos in the hopes of finding the next Bitcoin. But things are not that easy as the crypto market has become really competitive and small projects are being overshadowed by well-established corporations.

But this does not mean we should avoid penny cryptos. With smart strategies, good timing, and patience, we can make money from even the cheapest cryptos on the market. 

Before we delve any deeper and look at the best penny cryptos that are under $1 in 2022 and how to find penny cryptos worth investing in, we first have to differentiate penny cryptos and look at the differences.

There are four categories that differentiate them.

  • Lavish cryptos
  • Fallen cryptos 
  • Motionless cryptos
  • Newly minted cryptos

Lavish cryptos are the ones with huge supplies. Fallen cryptos are the ones who saw huge falls after hitting high values. Motionless cryptos are cryptocurrencies that have seen minimal fluctuation, despite being on the market for a long time. Finally, newly minted cryptos are the ones that are new and generally unknown to the market.

When deciding which penny crypto to watch we need to understand that each of those cryptos needs a different kind of approach when we are trading with them. These cryptos are just as easy to manipulate as their counterparts, penny stocks. So before we start trading we need to set up a good strategy and exit plan.

A Closer Look At Different Kinds of Cryptos

Now let's take a look at different kinds of crypto, how they are different from each other and what opportunities each one of them brings us. 

Lavish crypto

These cryptos have high supplies and usually trade at lower prices. When dealing with these types of cryptos, the main thing to take into consideration is that they are least likely to have really big spikes, as astronomical supplies and high prices are not easy things for a coin to achieve simultaneously. The reason behind it is that when calculating the market value (market cap) of the token we multiply the current value with the circulating supply and if both of those metrics are high, the market value of the token would become unbelievably high, even dwarfing Bitcoin.

When dealing with that kind of crypto, we have to look not only at the price, but the percentage it gains. For example, if we buy a token, at the trading price of $0.05, and it reaches $0.1 it saw a 100% gain, and by selling it we would double our investment. These coins are not good to hold for an extended period of time.

One of the best cryptocurrencies that fall into this category and is being looked at by a large number of traders is Harmony (ONE). Currently, it trades at $0.04 with a total supply of just above 13 billion and ranks around 100 by its market capitalization. Harmony is a sharing-based blockchain, designed to support dApps. It has a really good performance, as Harmony separates its database into shards (segments).

Despite the fact that Harmony is built on Ethereum, it avoids one of the biggest problems that Ethereum faces, which is congestion and high gas fees by implementing random state sharding.

Fallen cryptos

Fallen cryptos are cryptocurrencies that used to be worth big money and had great market capitalization, but for some reason now trade at significantly lower prices. We like to call these types of cryptos “gambling cryptos”. When a token had established itself on the market, but then suddenly took a nosedive, it is generally caused by miscalculations and really big mistakes from the people who run that project. 

So when we think it's a good thing to invest in that kind of token in the hopes that it will return to its glory days, we need to do really good research to see if this is possible. One of the first things we have to look at is why it fell and if the damage can be repaired. Trust and dedication are what determine if there is a possibility for a return. More than value, those tokens lose the trust of investors who took huge losses, and without a great amount of dedication from the creators of the token to put it back on its feet, those tokens are destined to spend the rest of their time on the lower surface of the crypto market.

Currently one of the most relevant fallen tokens is TerraLUNA and TerraUSD. Both being part of the Terra network, the start of May was catastrophic for the Terra project in general. In the early days of May, an astronomical amount of money was withdrawn from the funds that supported TerraUSD, Terras’ stablecoin. Which saw its sister token Luna take a big hit and lose almost 100% of its value. This event saw lots of investors fleeing the Terra project, but also gave penny crypto traders a new field to explore, with a lot of people buying huge amounts of LUNA for a few dollars.

Terra now plans to come back with Terra 2.0 and will be an interesting token to look at during its early days.

These kinds of tokens are usually a bad investment as, after huge falls, it's pretty much impossible to regain the trust of the investors. Our suggestion would be that if you really want to invest in this kind of crypto, don't put a lot of money into it. With a small investment, you are able to buy a huge amount of tokens, and after that just hold them in the hopes that one day your meaningless investment would bring you some profits.


Motionless crypto

Motionless cryptos are cryptocurrencies that have been on the market for a long time and have cemented themselves, but their price does not fluctuate that much. Most of those tokens are stablecoins that remain at around the $1 price point, with small unnoticeable changes, and are generally tied to other currencies.

When it comes to stablecoin, there are two types of them. One which has fiat (real money) backing its price, examples of it are USDT, USDC, and BUSD. The second type of stablecoins is algorithmic tokens, which are not supported by fiat and are tied to other cryptocurrencies.

So you might have a question as to why you should invest in this kind of token, which retains its price and there are no opportunities for profit. The simple answer is safety. While trading, there might be times when you have assets that, at the moment, you don't want to trade with. This is where stablecoins come in handy as it is the best way to keep your crypto in an easy-to-reach space and be sure that changes in the market won’t affect your portfolio.


But this does not mean that you are 100% safe. Stablecoins are still a form of crypto that is tied to a market and some unforeseen events might alter this stability. As we mentioned before there are two types of stablecoin, one that has fiat as its backing and the second one which is tied to other cryptocurrencies. This second type of stablecoin is the most vulnerable to those unforeseen events, as they depend on another crypto, and a great example of it happening is the recent TerraUSD crash.

So we would suggest that if you plan to invest in stablecoins, invest in ones that have fiat as a backing. The most well-established ones are USDT, USDC, BUSD, TUSD, and PAX.

Newly minted cryptos 

When it comes to newly minted cryptos, they are the best penny cryptos to buy now. With the recent trends of the metaverse and Web3 movement, a new market has emerged, the most prominent of which are Play-to-Earn and Move-to-Earn. With those projects, there come new tokens, and they are one of the best penny cryptos to buy right now. If we surf the web we will stumble upon lots of new projects that are joining the market now. As their tokens get listed on exchange platforms, they usually cost a few cents at most and then see big gains, where we can look for profits. 

Like with every other crypto, things are not simple when it comes to newly minted cryptos. There are two possibilities, either it will fail or succeed, and it's on us to determine which ones are destined for failure and which are penny cryptos that could explode and see huge gains.


Determining Factors in Choosing What to Invest In

So, what should we look at when choosing which newly minted crypto to invest in?

One of the main determining factors is the team behind the project. We have to study the whole team, who they are, what experiences they have, and if they have worked or are working on any other project. The second thing to look at is the project itself. What plans do they have, is there a lot of room for development, what usage will the token have, and is it sustainable?

One of the best places to look for these new upcoming tokens is Decentraland. When joining Decentraland you create your own avatar and explore their virtual world. With the new Play-2-Earn market emerging, countless new projects pop up in this metaverse, with their own tokens and huge potential for growth.

Also, if you are specifically looking for crypto under a penny, Defiland (DFL) is the one to look at as its NFT-based Play-2-Earn system does not require an initial investment, and users can join for free and grind their way into making a good amount of money.

Where Can We Buy This Penny Crypto?

Want to know where to buy penny cryptocurrencies? There is no single specific network that's good for purchasing penny cryptos. When it comes to lavish, fallen, and motionless penny cryptos, we can buy them on most of the big platforms, and it comes down to preferences and the volume we plan to trade with, as some trading platforms, such as Binance, do not allow you to make trades of less than $10, while platforms like does not have those limitations.

There is also one last thing to take into consideration. We have entered a new crypto winter that has seen prices plummet as a result. Some of the well-established projects went bankrupt, which opens up the path for new projects to emerge from this cold winter and see huge success.

Things We Learned From This Guide

  • Not every penny crypto is the same, and they have different reasons as to why they are worth so little
  • Newly minted coins have the best chance of giving us the biggest profits
  • These tokens are risky investments, and it is not suggested to invest a lot of money into them
  • These tokens can be purchased on most crypto exchanges

FAQs on Penny Crypto

Will Dogecoin reach $1?

It is extremely unlikely that Dogecoin will ever be able to reach the $1 mark. Dogecoin currently has 132 billion coins in circulation with an unlimited supply. Because of this, if Dogecoin ever reaches the $1 mark, it will give it a market cap of over $132 billion and since it is a meme token, it is unlikely for it to reach this number.

What is the best penny crypto to buy?

Currently, the best penny crypto to invest in is the Stellar XLM. Currently, it trades for $0.1 with a market capitalization of $2.8 billion. This is a coin with huge utility and probably a bright future, so investing in this token is a good idea.