Cryptocurrencies are one of the most polarizing investment opportunities of the 21st century.
As a medium of exchange, they are highly volatile, quite unpredictable, and often lack credibility.
However, in some instances, there are crypto investors who went from being underground speculators to instant millionaires in a matter of seconds.
This begs the question, is it smart to bet on crypto?
If so, which cryptocurrencies or blockchains should you invest in so that you have the best chance of success?
In this article, we explain what crypto penny stocks are, what to watch out for, and offer twenty penny crypto stocks to explore.
If you are interested in better understanding the crypto universe, and what it has to offer, you won’t want to miss out on our analysis.
What is Penny Crypto?
Crypto penny stocks are defined as any penny crypto asset that trades anywhere from a few cents to just under $5 per coin or share.
This includes cryptocurrencies, blockchain technologies, and any business that operates within the crypto ecosystem.
Of these businesses, multiple niche markets exist including mining, trading, crypto exchanges, cryptocurrency development, blockchain platforms, and more.
Largely due to the creation of Bitcoin in 2008, cryptocurrency and blockchain technologies introduced the world to a new realm of possibilities and challenged the status quo by disrupting the conventional FIAT currencies system.
One way that it achieved this is through a decentralized framework whereby no single entity, like a federal government, can control who may use it and how much they can spend. Therefore, blockchains would theoretically even the playing field by lowering barriers to entry for emerging markets and increasing accessibility to capital around the globe.
Beyond that, cryptocurrencies are beneficial because they are highly transparent networks where every transaction is openly monitored by stakeholders or algorithms.
Though individual identities remain anonymous, the amount of money exchanged and the associated account are all recorded on the blockchain ledger. This ensures that a crypto network remains credible and that account holders actually have access to the assets they claim to hold.
All-in-all, blockchain technology has a lot of potential use cases, but the market is still extremely young. As such, you should be careful when investing in penny crypto, or any blockchain asset for that matter, given that its role in society has yet to be determined.
Are Penny Crypto Assets Risky?
To put it lightly, penny crypto assets are extremely risky.
If 2022 is any indication of what is possible in the crypto market, investors should be highly vigilant when investing in cryptocurrencies.
Although the concept of crypto is very promising and may eventually replace the traditional monetary system, there is too much uncertainty surrounding the market as a whole, meaning that no one can predict where even the most reputable crypto assets (ie. Bitcoin or Ethereum) are headed.
Since many of these risks are so relevant today, we will dive into each of them further so that you can be more aware of what is lurking in the dark.
Lack of Adoption & Understanding
With the full faith and credit of the US government, the US dollar is the most stable and trusted currency in the world. In other words, it is unlikely that the US government will go bankrupt, and therefore you can bet with confidence that your money will maintain its relative value, but it isn’t perfect either.
Because of these fiscal actions, the credibility of the US dollar is coming into question and being challenged by other countries and assets such as crypto.
However, the success of crypto largely depends on its adoption in society.
While it may not require the same level of faith and credibility as the US dollar, it certainly needs to instill confidence in its holders, otherwise, it will collapse like many other forms of currency before it.
This requires a common understanding amongst everyday people so that it can actually be used as a medium of exchange, and not just a speculative play by Apes and Degens.
On the flip side, if a cryptocurrency or blockchain achieves widespread adoption and maintains a predictable/ stable market volume, then this would be a tremendous achievement for that network and a positive towards global legitimacy.
Overall, very few crypto assets have come close to this level of confidence and adoption, which means that the crypto market as a whole still has a way to go before anything is guaranteed.
Hackers and Scams
Given how young the crypto market is and the lack of asset protection that exists, it is clear that the technology is highly susceptible to hacks and scams as exemplified by the calamity that was 2022.
To demonstrate how bad it was, here are five of the worst crypto hacks of 2022.
- Ronin bridge hack – $612 million stolen.
- FTX wallet hack – $477 million stolen
- Wormhole bridge exploit – $321 million stolen
- Nomad token bridge exploit – $190 million stolen
- Wintermute hack — $160 million stolen
Even though these attacks are concerning and detrimental to early-stage adopters, the crypto ecosystem is likely to learn from them over time and install measures to prevent them from happening in the future.
Ultimately, with the introduction of new and highly sophisticated technology, it was inevitable that the network would be exploited.
Fortunately, these attacks will help strengthen the system in the long run as it figures out how to integrate it into the modern world.
Increased Regulatory Scrutiny
Though it is not necessarily a bad thing, the implementation of more stringent laws and regulations is likely to hamper the expansion of the crypto market.
After everything that happened in 2022, these actions are necessary to protect users and the financial systems of various countries from being exploited.
Just as regulators found ways to limit what was deemed acceptable content on the internet, they will introduce laws that prevent certain actions and opportunities on blockchain networks.
This will help improve the integrity of the system, while also limiting the level of corruption that occurred in its early stages.
Of the laws being introduced, investors should pay close attention to how entities like the SEC define crypto assets and what crypto exchanges like Coinbase, Binance, Kraken, etc. are being required to do.
For more information on crypto regulations in 2023, check out this article by security.org.
Top 20 Penny Crypto Stocks
Now that we’ve covered some important considerations before investing in crypto assets, it’s time to explore what opportunities exist in the penny crypto market.
Since there are so many penny cryptocurrencies that exist today, we emphasized the importance of a strong network effect (via market cap, trading volume, circulating supply), overall utility (smart contracts, PoS vs. PoW, etc.), and price stability.
With that being said, here are the top penny cryptocurrencies in the market.
For in-depth information on the crypto market and everything blockchain, check out CoinMarketCap for financial data, price performances, overviews, and more.
*Prices recorded 1/18/2023
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XRP ($XRP)
Price: $0.6108
Market Value: $32.75 billion
Circulating Supply: 53.61 billion XRP tokens
Overview & Analysis:
XRP is a native crypto, operating on the XRP Ledger, created by Ripple Labs. The blockchain is an open-source and decentralized technology that includes low-cost, scalable, efficient, and green attributes. XRP offers a variety of use cases that include micropayments, DeFi, and eventually NFTs. When it was founded, its developers aimed to produce a faster, more energy-efficient blockchain than Bitcoin. Today, it has over a $32.75 billion market cap, despite falling 33.62% over the last year.
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Cardano ($ADA)
Price: $0.3228
Market Value: $11.37 billion
Circulating Supply: 35.25 billion ADA tokens
Overview & Analysis:
Cardano is an open-source and decentralized blockchain created by Input Output Hong Kong (IOHK). The project aims to provide a more secure and sustainable blockchain ecosystem for the development and execution of smart contracts and decentralized applications.
Cardano is one of the biggest blockchains to successfully use a proof-of-stake system, which requires a lot less energy than proof-of-work. Furthermore, Cardano is considered to be a 3rd generation blockchain, meaning that it is more advanced and efficient than the 1st and 2nd generation technologies. Cardano’s native token, ADA, currently trades at a market cap of $11.37 billion and is down 18.36% in the last year.
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Dogecoin ($DOGE)
Price: $0.06767
Market Value:$9.58 billion
Circulating Supply: 141.68 billion DOGE tokens
Overview & Analysis:
Dogecoin is a cryptocurrency that was first created as a joke by software engineers Billy Markus and Jackson Palmer. The meme coin was inspired by the popular internet meme “Doge”, but has since evolved into a legitimate form of digital currency, trading at just below a $10 billion market capitalization. Dogecoin uses a proof-of-work consensus mechanism, like Bitcoin, but with a faster block time and a higher maximum supply of coins. The crypto token has primarily been used as a tipping system on Reddit and Twitter to reward creative and high-quality content. Largely in part due to Elon Musk who dubbed DOGE his favorite coin, Dogecoin is a favorite amongst crypto enthusiasts and one of the most popular fan tokens.
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Polygon ($MATIC)
Price: $0.664
Market Value: $6.14 billion
Circulating Supply: 9.24 billion MATIC tokens
Overview & Analysis:
Polygon, formerly known as Matic Network, is a decentralized blockchain platform that is built on top of the Ethereum blockchain. The network is designed to provide a more scalable and efficient infrastructure for developing and executing decentralized applications and smart contracts.
Polygon uses a unique consensus mechanism called the Plasma Framework which is a layer 2 scaling solution that allows for faster and cheaper transactions. Its native token, MATIC, is used to pay transaction fees, enable governance, and interact with smart contracts on the blockchain.
Polygon aims to stimulate mass adoption of blockchain technology by fixing many of the problems of scalability on many networks. The project allows up to 65,000 transactions per second on a single chain and achieves a block confirmation rate of fewer than two seconds. MATIC currently trades at a market value of $6.14 billion.
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Shiba Inu ($SHIB)
Price: $0.000007799
Market Value: $4.60 billion
Circulating Supply: 589.35 trillion SHIB tokens
Overview & Analysis:
Shiba Inu is a cryptocurrency based on the Dogecoin meme, which features a Shiba Inu dog. The digital token is a decentralized coin that is built on the Ethereum blockchain and uses a proof-of-stake consensus mechanism.
Like Dogecoin, Shiba Inu started as a joke but has since grown into a legitimate form of digital currency and is one of the most popular fan tokens. Shiba Inu is unique in that it has an uncommon distribution model whereby the developers pre-mined 50% of the total supply of SHIB and sent them to various holders through “community airdrops”. As a result, Shiba is more decentralized than other cryptocurrencies because there are many smallholders of the token, rather than a concentrated few.
According to the anonymous founder of Shiba Inu, Ryoshi, the end goal for SHIB is that it becomes a global stable currency “that plebs across all countries are able to use as both a store of value and method of payment.”
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TRON ($TRX)
Price: $0.09764
Market Value: $8.67 billion
Circulating Supply: 88.76 billion TRX tokens
Overview & Analysis:
Tron is a decentralized blockchain-based operating system developed by the Tron Foundation. It aims to build a free and global digital content entertainment system with distributed storage technology. Essentially, the Tron network allows for decentralized peer-to-peer distribution, storage, and management of digital content, which enables creators to share content without the need for intermediaries like Google.
This is quite advantageous because it reduces costs for consumers while allowing the creators to retain more commissions and control over their content. Overall, this decentralized framework could help Tron and its native coin TRX separate itself from the pack in the entertainment sphere.
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UNUS SED LEO ($LEO)
Price: $3.96
Market Value: $3.67 billion
Circulating Supply: 928.67 million LEO tokens
Overview & Analysis:
UNUS SED LEO is a crypto coin issued by iFinex, the parent company of the popular crypto exchange, Bitfinex. The token is built on the Ethereum blockchain and was created as a means of raising capital for iFinex. They released the token after the company was facing legal troubles related to allegations that it used funds from its stablecoin Tether (USDT) to cover a lack of capital.
As a result, LEO token holders received a percentage of the trading fees generated by iFinex platforms as a reward to those who supported the business, while also being given the right to participate in the governance of iFinex; LEO owners also save on transaction fees when using Bitfinex. Interestingly, iFinex is using a token burn mechanism whereby they are committed to buying back all of the UNUS SED LEO from the market at its present value; the amount purchased is equal to at least 27% of revenues generated by the company.
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Toncoin ($TON)
Price: $2.23
Market Value: $7.67 billion
Circulating Supply: 928.67 million TON tokens
Overview & Analysis:
Toncoin is a decentralized layer-1 blockchain developed by the encrypted messaging platform Telegram. However, the project was soon abandoned by the company and was then taken over by the TON Foundation and renamed “The Open Network”. TON differentiates itself in that it has a multi-level structure built on the principle of sharding, which involves the use of multiple subnets, that each serve a specific purpose on the blockchain. This allows TON to avoid an accumulation of unverified blocks and speeds up tasks on the network.
Due to its well-established network structure, the blockchain provides ultra-fast transactions, verifying, and can process massive amounts of transactions per second. The TON network offers users multiple services including TON wallets, third-party apps, and a dApps development platform. The native coin currently trades at a market value of $7.67 billion.
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Stellar ($XLM)
Price: $0.123
Market Value: $3.43 billion
Circulating Supply: 27.89 billion XLM tokens
Overview & Analysis:
Stellar is a decentralized, open-source blockchain platform that is built to facilitate cross-border transactions between different currencies. The Stellar network uses a native cryptocurrency, called Lumens, as a bridge currency to facilitate transactions. Stellar has developed a consensus protocol, called the Stellar Consensus Protocol (SCP), which is designed to be energy efficient and provide a high degree of security for its users.
The Stellar network has built-in support for smart contracts, which allows users to create dApps on the platform. What separates Stellar from traditional exchanges is the fee structure which charges users a mere 0.00001 XLM per transaction. This ensures that token holders retain more of their money when exchanging between various currencies and incentivizes them to use it more often. Another unique advantage of Stellar is that they provide various grants to venture start-ups through the Stellar Development Foundation. However, unlike most blockchains with community funds, Stellar allows its users to vote on which ventures deserve the support the most. Overall, this network is an interesting project to keep in mind and pay close attention to.
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Cronos ($CRO)
Price: $0.06659
Market Value: $1.68 billion
Circulating Supply: 25.26 billion CRO tokens
Overview & Analysis:
Cronos is the native coin for the Cronos Chain, a decentralized and open-source blockchain developed by the trading and financial services company Crypto.com. As an owner of CRO, you can stake your coins to the Crypto.com Chain which allows you to act as a validator and earn fees for processing transactions on the network. The coin can also be used as a method of payment on the network, with the potential to receive up to 20% cash back by paying merchants in CRO.
Users can earn annual interest of up to 10-12% on Crypto.com Coins by staking them to its exchange app. Overall, Cronos is primarily meant to help strengthen the Crypto.com ecosystem and accelerate the adoption of the crypto space. It currently trades at a market value of $1.68 billion.
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NEAR Protocol ($NEAR)
Price: $1.48
Market Value: $1.47 billion
Circulating Supply: 990.45 million NEAR tokens
Overview & Analysis:
The NEAR Protocol is an open-source, decentralized blockchain-based platform that aims to create a scalable and efficient infrastructure for dApps. It uses a new consensus mechanism called “Nightshade”, a variation of sharding, that is built to be energy efficient and deliver a high degree of security. As such, the NEAR Protocol can achieve up to 100,000 transactions per second and close to instant transaction finality due to a one-second block cadence.
As for the protocol’s native coin, NEAR, it is used to pay for transactions on the network and to secure the network via staking. In addition, NEAR grants users access to certain features on the network, including the ability to participate in governance and earn rewards. Overall, the NEAR community is aiming to build a platform that is “secure enough to manage high-value assets like money or identity and performant enough to make them useful for everyday people.”
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ApeCoin ($APE)
Price: $1.36
Market Value: $500.16 million
Circulating Supply: 1 billion APE tokens
Overview & Analysis:
ApeCoin is a utility token used within the APE ecosystem and is intended to empower and incentivize a decentralized community of developers, building at the forefront of the metaverse. Coin holders govern themselves through a decentralized governance framework by controlling the ApeCoin DAO and voting on how the Ecosystem Fund should be distributed.
To support community-driven initiatives, 62% of all ApeCoins are held in the fund and invested in various network projects. This encourages third-party developers to participate in the network since APE holders are given exclusive access to certain parts of the ecosystem which include various games and services. All-in-all ApeCoin is a pretty standard protocol and is currently trading at a market value of $500.16 million.
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Filecoin ($FIL)
Price: $3.90
Market Value: $1.81 billion
Circulating Supply: 463.64 million FIL tokens
Overview & Analysis:
Filecoin is an open-source and decentralized storage network that uses the InterPlanetary File System (IPFS) to store and retrieve files. The open protocol is backed by a blockchain network that records the commitments made by users via its native currency FIL. On the platform, developers can create cloud file storage systems similar to Microsoft’s Dropbox or Apple’s iCloud.
According to its developers, Filecoin aims to solve inefficiencies with file storage and retrieval. It’s doing so by allowing people to gain ownership of their data, as well as making the web more accessible worldwide. The platform operates in a peer-to-peer manner which incentivizes participants to mine and store data for other users. Of those participants, whoever acts with the most integrity and stores the most data are rewarded handsomely for their efforts. All-in-all the network is striving to “store humanity’s most important information” efficiently and securely.
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LidoDAO ($LDO)
Price: $1.84
Market Value: $1.64 billion
Circulating Supply: 890.17 million LDO tokens
Overview & Analysis:
LidoDAO is a decentralized autonomous organization that is meant to provide liquidity to the Lido Staking Pool for Ethereum 2.0. It is built on the Ethereum blockchain that allows users to earn interest on their staked Ethereum by providing liquidity to the pool. LidoDAO is open-sourced, meaning that it is governed by its token holders, who can vote on various proposals and decide on the direction of the organization. Furthermore, stakeholders can gain access to certain exclusive features, like higher interest rates or priority access to staked ETH, if they own the LidoDAO native currency. The LidoDAO project was launched in 2020 and is now trading at a market value of $1.39 billion.
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Algorand ($ALGO)
Price: $0.113
Market Value: $894.90 million
Circulating Supply: 7.93 billion ALGO tokens
Overview & Analysis:
Algorand is a decentralized blockchain protocol that utilizes a unique consensus algorithm called Pure Proof of Stake. The network’s objective is to create faster, more secure, and more scalable transactions for dApps and financial services. The protocol uses a permissionless approach, which means that anyone can participate in the network as a validator or user. Its native coin, ALGO, is used to pay transaction fees and to participate in the voting process. Today, Algorand trades at a market value of $894.90 million.
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VeChain ($VET)
Price: $0.01911
Market Value: $1.39 billion
Circulating Supply: 72.71 billion VET tokens
Overview & Analysis:
The VeChain blockchain focuses on providing a comprehensive governance structure, decentralized applications, and decentralized financial services. It’s designed to be highly scalable and secure to create solutions in a variety of industries such as supply chain management, logistics, and intellectual property protection. VeChain utilizes a dual token economic model whereby its VET token is the primary medium of exchange and its VTHO token is used to pay transaction fees.
Where the platform differentiates itself is that it offers a decentralized trust layer for multi-party ecosystems meant to disrupt traditional business models. Already, VeChain is finding major success with high-profile clientele and government bodies and has demonstrated its capabilities in multiple instances. As such, we believe it is one of the best platforms out there today.
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Hedera ($HBAR)
Price: $0.05454
Market Value: $1.83 billion
Circulating Supply: 33.54 billion HBAR tokens
Overview & Analysis:
Hedera Hashgraph is a decentralized public network using the Hashgraph consensus algorithm. It provides fast, secure, and fair transactions for dApps and services through its distributed ledger technology. Uniquely, the protocol uses a permission approach, which means that only a select group of validators can participate in the network’s consensus process. It operates in this manner because it improves efficiency significantly and is more secure against external threats like hackers. This helps the blockchain achieve greater speeds and scalability, while also reducing costs. Beyond that, the platform offers several services including NFTs, smart contract tools, and decentralized file storage services. All-in-all it’s a solid alternative compared to most penny cryptos and is currently trading at a market value of $1.83 billion.
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Decentraland ($MANA)
Price: $0.3997
Market Value: $757.14 million
Circulating Supply: 1.89 billion MANA tokens
Overview & Analysis:
Decentraland is a virtual reality platform built on the Ethereum blockchain where users can create and monetize content, applications, and games. By purchasing digital plots of land, participants essentially own virtual real estate that can be used for a multitude of purposes. What makes Decentraland unique is that is meant to be an artistic medium and a new way to conduct business. In its game-world, there are 90,601 parcels of LAND which are each represented by a non-fungible token. Though LAND owners are free to build whatever they want on their space, the Metaverse is somewhat organized into several districts, each with a different size and theme. In the decentralized ecosystem, users use the native coin, MANA, to conduct transactions and exercise ownership of virtual assets. Since its initial coin offering of $24 million, Decentraland has grown significantly, now trading at a market cap of $757.14 million.
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EOS ($EOS)
Price: $0.6493
Market Value: $719.42 million
Circulating Supply: 1.11 billion EOS tokens
Overview & Analysis:
EOS is a blockchain platform that uses the EOS.IO software that enables a decentralized ecosystem where developers can create decentralized applications and smart contracts. The network aims to provide a more flexible, scalable, and low-latency solution for the development and deployment of these applications which leads to a better experience for developers.
Unlike most platforms, EOS uses a consensus mechanism called Delegated Proof of Stake which offers faster transaction speeds and more efficient uses of resources compared to other mechanisms like PoW and PoS. EOS is truly the ideal blockchain for developers as it liberates them to align their creations with what they imagine. Through programmable architectures, versatile blockchain infrastructure, and custom smart contracts, the EOS Network has become a diverse community with energetic ideas and leadership.
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Chiliz ($CHZ)
Price: $0.06954
Market Value: $525.34 million
Circulating Supply: 7.57 billion CHZ tokens
Overview & Analysis
Chiliz is a cryptocurrency used to access and participate in the Chiliz.net platform, which is a fintech company that provides blockchain-based solutions for sports and entertainment. Through its Chiliz tokens, fans can engage with their favorite teams, players, and events through a variety of activities like fan tokens, voting rights, games, and experience. When on the platform, participants use the native Chiliz tokens to purchase fan tokens which are then used to interact with a club in a variety of ways.
To strengthen its offering, the platform has teamed up with multiple reputable sports teams including FC Barcelona, Paris Saint-Germain, Atlético Madrid, and Juventus, among others. This direct participation is a first of its kind for the average sports fan and a creative way to build a more immersive experience in sports and entertainment. All-in-all, Chiliz is a unique digital asset in many ways and is currently trading at a market capitalization of $525.34 million.
Is it Worth Buying Penny Crypto Stocks?
After exploring twenty of the most promising penny cryptocurrencies it is time to decide whether you should buy penny cryptos or not.
Though there are certainly some exciting projects out there aiming to disrupt traditional financial institutions and centralized exchanges, most crypto investors should remain patient and wait for the industry to establish itself further.
The reality is that digital assets are highly unpredictable and it is difficult to tell which of them will come out on top as the overall best penny cryptocurrency.
If the rise and fall of meme coins are any indication of what is possible in this market, most crypto investors are best suited to find trading strategies that limit their portfolio exposure to penny cryptocurrencies so that they protect their downside and invest in more productive assets.
That being said, there are opportunities to generate huge returns with these digital assets, therefore it may be reasonable to have a small portion of your portfolio allocated to these products.
Overall, if you are planning to invest in crypto, focus on finding assets with a strong network effect, meaningful utility, and some degree of price stability.
One last thing, stay patient, hodl for the long run, and let’s ride this thing to the moon.
Want to learn more about Ethereum 2.0?
Check out our breakdown of The Merge here.