Penny cryptocurrencies became the talk of the town after Ripple investors went around painting the town red.
That penny cryptocurrency went from around $0.20 apiece two months ago to over $3.50, delivering exponential gains in a very narrow time frame. So it’s obvious why penny cryptos are drawing investor interest.
Why Buy Cheap Cryptocurrencies?
When the average Joe hears of the bull market in cryptocurrencies, he is tempted to buy in. But the first thought that pops in his head is, “Bitcoin is too expensive. I don’t have $16,000. What cheaper alternative options do I have?”
Investors often draw parallels between traditional investments, like stocks, and the very unconventional cryptocurrency investments. In actuality, they are poles apart. A key difference is that, while a stock must be bought as a whole, a cryptocurrency can be bought in fractions. So, you may invest in these seemingly expensive cryptocurrencies with whatever little nest egg you have.
However, with their prices at all-time highs, the chances of achieving exponential gains from here on appear to be slim. Just ask yourself, “What is the possibility of Bitcoin doubling from $15,000 to $30,000—or of Ethereum doubling from $1,200 to $2,400—in the next two months?”
This is why a lot of new crypto investors are turning to penny cryptocurrencies, many of which are currently trading for only a fraction of a penny.
So, if you’re looking for potentially promising penny cryptocurrency investments, you’ve come to the right place. Here are two of my top picks for the best penny cryptocurrencies in 2018, along with solid reasons why I chose them.
Two Cheap Altcoins in 2018
1. Stellar (XLM)
After Ripple’s meteoric rise, I felt tempted to look for another cryptocurrency that boasted Ripple-like features yet had its own unique moat to drive demand. Mind you, Ripple is a blockchain-based network primarily created for banks, which allows them to save on transaction fees when moving money across borders.
My first pick, Stellar, does exactly the same thing, except it is a Ripple-equivalent made for individuals, not banks. Stellar was created by the same guy who co-founded Ripple. Its cryptocoin is called Lumen, and it trades under the symbol XLM.
This cryptocurrency is slowly climbing the ladder of market value, one step at a time. A few months ago, very few in the inner circles of the crypto-world had heard of it. Today, Stellar is sitting at the eighth spot on the leaderboard of the most valuable cryptocurrencies in the world.
Stellar allows people, separated by borders, to transact with each other in Stellar Lumens. It facilitates instantaneous money transfers from one country/currency to another, charging minuscule transaction fees compared to the traditional SWIFT transfers and other interbank wire transfers.
There’s one fundamental reason why I’ve put Stellar on my short list of cheap cryptocurrencies. Stellar stands a good chance at attaining significant growth in 2018.
Stellar has recently shaken hands with IBM (NYSE:IBM) for a joint venture, under which IBM may bring Stellar’s blockchain technology to the mainstream.
A number of global banks are also taking interest in Stellar’s cross-border payments platform that promises to empower people over banks.
Chart courtesy of TradingView.com
The Stellar price is up more than 1,300% in the past two months since the bull market kicked in. In fact, its price performance even beats Ripple and Bitcoin. Trading at around $0.60 apiece as of this writing, Stellar is one penny cryptocurrency you don’t want to miss.
Read more about Stellar Lumens here.
2. Cardano (ADA)
My second pick is Cardano, which recently took center stage after dethroning the more popular cryptocurrency Litecoin from its long-held fifth spot in the market cap rankings. Cardano’s crypto-coin is called ADA, and it trades under the same symbol.
Just as Stellar shares its roots with Ripple, Cardano shares its roots with Ethereum. Cardano was created by an Ethereum developer who also co-created Ethereum Classic, another crypto-coin that was hard-forked from Ethereum.
Cardano, like Ethereum, is a blockchain-based platform for creating smart-contract-based decentralized applications (Dapps). There’s a catch, however, and that’s why it still trades for less than a penny.
Cardano is still undergoing development, and it doesn’t yet support Ethereum-like smart contracts. The upgrade, dubbed “Shelley,” which will add a layer for smart contracts, is due to be launched later this year. This is exactly why I believe it’s an undervalued cryptocurrency that may soar in 2018.
Cardano is often dubbed the “Japanese Ethereum.” That’s because Cardano’s team has picked Japan as their launchpad. Cardano knew it would have a tough time breaking Ethereum’s monopoly in the West, so it decided to tackle it from the East.
Bear in mind, the majority of the Japanese population is already familiar with cryptocurrencies, and a significant number of Japanese people have begun investing in them or using them for day-to-day transactions. So, Japan may serve as one of the best markets for Cardano to drive public adoption.
At this point, I must point out that Cardano is not only faster than Ethereum; it is vying to support interoperability on its platform. Simply put, Cardano promises to support Bitcoin and Ethereum Classic on its platform and eventually expand the universe.
The below chart shows how the Cardano price performance stacks up against Ripple. (Note that the prices are expressed in BTC, since ADA-to-USD pairings are not available on popular exchanges.)
Chart courtesy of TradingView.com
To find out more about Cardano, and to read my Cardano price prediction for 2018, click here.
After a cursory look, penny cryptocurrencies seem like very lucrative investments in the current bull market. However, I must warn you that most of the penny cryptocurrencies are nothing more than pump-and-dump schemes. Sure, you could make an overnight killing if you get lucky, but it’s always safer to play a game of skill versus a game of luck.
The only skill you need in order to hunt down the best penny cryptocurrencies is to track their utility. This is one fundamental that won’t wrong you in the long run.
Remember, with over 1,300 cryptocoins currently trading on cryptocurrency exchanges, only a handful may survive the test of time. In my humble opinion, Stellar and Cardano have a fair chance. At the pace that their prices are multiplying, I wouldn’t be surprised if they turn out to be the best penny cryptocurrencies in 2018 for delivering Ripple-like returns.