One of the most significant focus points is retail trading trends this year. Whether it’s the latest round of low float penny stocks or stocks about to short squeeze, you’re sure to find plenty of topics to base your watch list on. But something else that has begun emerging is a growing body of traders looking for the cheapest cryptocurrencies to buy. Today we’ll look at some active cryptos trading like penny stocks under $5.
Penny Stocks TL;DR 30-Second Summary
The definition of penny stocks involves companies trading for less than $5
Since there is so much potential in stocks under $5, other assets have come into focus
Thanks to massive breakouts and broader adoption of digital asset trading platforms, crypotcurrencies are more accessible now compared to years past
With the stock market failing to give directio and risk appetite still high, crypto traders are on the look out to get their fix of cheap coins and tokens to buy
The beauty of penny stocks is that they don’t cost a ton of money. We’re talking about stocks trading for pennies a share at times. But even the “more expensive” names can offer the potential for massive gains thanks to lower prices. Cryptocurrency has begun to show a similar trend, and today we look at some penny cryptocurrencies that traders are buying right now.
Brief Overview Of Crypto
Cryptocurrencies are a new form of money. In this case, we’re talking about entirely digital money. Instead of governments or banks securing the capital in a bank, crypto is maintained and secured by a community via the blockchain. The most famous cryptocurrency, Bitcoin, launched in 2008 and has helped lead the broader adoption of digital money ever since.
One of the benefits of crypto is that the digital nature of the asset allows for faster and, in most cases, more cost-effective means of transferring money over the internet. Thanks to the blockchain, transactions are openly tracked, similar to a bank’s balance sheet or ledger.
Aside from the intrinsic value of faster and cheaper transactions, different cryptocurrencies have unique traits depending on the projects they’re part of. We’ll get into some of those details in this article as well. Similar to stocks representing public companies, cryptocurrencies (representing different projects) are traded to capture value outside the underlying asset.
Penny Cryptos To Watch
1. Fantom (FTM)
This article looks at some of the most popular crypto trading below $5 based on trading volume. Fantom is built by a team of blockchain developers based on a consensus algorithm. According to the project’s website:
“Fantom’s consensus [is] fully compatible with the Cosmos SDK and the Ethereum Virtual Machine to allow anyone to use it in a network that best fits their needs. Through the EVM, developers can utilize smart contracts on top of Fantom, and it allows projects to port their existing Ethereum dApps over to Fantom easily.”
The project typically would appeal to developers looking for alternative decentralized solutions. Its unique compatibility between transactions in addition to speeding up transactions.
Fantom Crypto Price Performance
CoinMarketCap’s data show that the total supply and circulating supply of over 1.5 billion coins. Max supply sits at 3.175 billion but don’t let the big numbers fool you. The coin has been trading more than $1.5 billion daily, and since last June, FTM’s price is up over 900%.
2. Tron (TRX)
Tron is one of the “OG” penny cryptos that has been in and out of the popularity circle over the last few years. Its blockchain-based system looks to achieve many more transactions per second than other things like Bitcoin and Ethereum, for instance. According to the project’s website, the transaction count is over 2,700,000,000.
Core partners of the project include Samsung, Opera, Poloniex, and Swisscom Blockchain, among others. You may have also seen discussions about Tron’s founder, Justin Sun, winning a lunch with the Oracle of Omaha, Warren Buffett.
The project’s delegated proof-of-stake consensus mechanism is popular if you’re looking for coins with a voting component. It also adds to the efficiency aspect as far as time to complete transactions is concerned.
Tron Crypto Price Performance
The TRX token is still only 7 cents based on its USD price. As one of the cheapest cryptos on this list, it’s also important to note the makeup of the token. According to CoinMarketCap, TRX has a total supply of more than 100 billion tokens making this a potentially highly-diluted crypto. But since it’s got a liquid market (roughly $1.3 billion a day), traders look for small moves on larger positions. Even though this is the case, it’s worth mentioning that TRX is up more than 100% in the last year and has seen highs of $0.18USD during that period.
3. XRP (XRP)
Similar to Tron, the XRP token was created to make transactions faster. The unique part about this is that it’s not based on blockchain but a distributed ledger database. Designed as an alternative to Bitcoin, the XRP Ledger also stores transaction details. The digital payment platform that XRP runs on is called RippleNet. The payment platform aims to allow instant transactions on a global scale. However, the payment network constructed on its ledger doesn’t use mining to validate transactions. XRP Ledger needs “trusted validator” nodes to reach an agreement faster than other cryptocurrencies.
What’s more, Banco Santander, Bank of America, and Standard Chartered were confirmed network users. Meanwhile, XRP has been in hot water as questions of it being a security have been brought up. The original complaint alleged that “Ripple Labs Inc. and two of its executives, who are also significant security holders…raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.” The outcome of this case is still yet to be seen.
XRP Crypto Price Performance
Right now, XRP trades around $0.75 and, by all accounts, would be considered a cheap penny stock if it were sold on a stock exchange. However, looking back to one year ago, XRP has made significant progress despite its low price. How much is XRP up so far? Since January of 2021, the token has climbed from around $0.21 to current levels right now, or just over 250%. XRP has even risen as high as $1.96 during that time.
4. Polygon (MATIC)
Previously known as Matic Network, Polygon aims to be useful for Ethereum scaling and infrastructure development. Its modular framework, Polygon SDK, allows the ability to create numerous applications and even multi-chain systems (also known as the Internet of Blockchains). Backed by Binance and Coinbase (NASDAQ: COIN), Polygon looks to foster widespread adoption of cryptocurrencies through solving issues related to scalability on myriad blockchains.
Like XRP and TRX, MATIC also aims to speed up transactions. The platform can handle 65,000 transactions per second. Since it’s also an ERC-20 token, MATIC runs on the Ethereum blockchain. Tokens are typically used for payment services on Polygon and act as a settlement currency between users operating in the Polygon ecosystem.
MATIC Crypto Price Performance
MATIC crypto’s price performance has been much more steady than other cryptocurrencies on this list. It has also been one of the biggest movers in the last year. In January of 2021, the MATIC crypto price sat around $0.018 (less than 2 cents). This weekend, MATIC was trading above $2.10, marking a move of over 11,000%; yes, you read that correctly. Despite it being a “penny crypto,” MATIC has experienced an explosive year in the market.
5. Cardano (ADA)
Cardano is another proof-of-stake coin to allow participants to actually be part of the network’s operation. As a result, holders of ADA crypto have a right to vote on any proposed changes to the software. Some examples of its use can be found in agriculture, believe it or not. Companies use Cardano to track produce from farm to table. This can help fight things like counterfeiting and see where products originated from.
In addition, thanks to a global focus on energy consumption for things like Bitcoin, ADA has become a stand-out. The project’s blockchain boasts less energy-intensive operation compared to Bitcoin.
ADA Crypto Price Performance
ADA crypto has an interesting one-year price history. For starters, it’s up more than 500% since January of 2021 and has also reached highs of over $3 during that time. However, if you look at the chart, overall, ADA crypto has been relatively flat since last March. However, with a max supply of 45 billion, it isn’t the largest structure. There are billions of coins in circulation, which could be why ADA is less volatile than some of its cheaper peers.
Final Thoughts On Cryptocurrencies
With the mass adoption of trading applications like Webull and other mobile-first platforms, digital currencies have become mainstream. The ability to trade stocks in one breath and immediately trade crypto in the next without changing platforms has become an excellent way for new traders to get introduced to this new market.
While cryptocurrencies have been around for over a decade at this point, it’s still a unique idea for the masses. With that could come plenty more use cases in the future, paving the way for cryptocurrency growth and mainstream acceptance. You’ve also got these digital currencies making a splash in the stock market with new ETFs popping up, including The ProShares Trust Bitcoin Strategy ETF (NYSE: BITO), Valkyrie Bitcoin Strategy…