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  • Penny cryptocurrencies are cheap coins valued at less than $1 with a potential of higher rewards but with equally higher risks.
  • Penny cryptos are vulnerable to pump and dump and rug pull scams.
  • The top 5 best cryptocurrencies to buy in 2021 as listed in this article are: Dogecoin (DOGE), Stellar (XLM), VeChain (VET), Basic Attention Token (BAT), and Ravencoin (RVN).

If you are looking for the best cryptocurrency to buy in 2021, then you are at the right place.

Cryptocurrency is the latest buzzword if you are speaking of making money or making an investment that is likely to bring you handsome returns. Bitcoin (BTC) was the first cryptocurrency to come out and is currently the top-rated crypto by market capitalization. However, while most people would wish to buy Bitcoin, it is a bit expensive. BTC/USD price is currently hovering at 48,520 on Coinbase. Apart from price, it would take long before one achieves the desired return on investment when they invest in Bitcoin.

As such, investors are looking for cheaper but highly rewarding options.

According to Statista, there are nearly over 6,000 cryptocurrencies as of August 2021. Unfortunately, it is not easy to foresee any other coin recording similar exponential growth that Bitcoin has displayed over the last decade.

Note that altcoins typically grow during the bull run and have a higher return rates with an even higher risk. However, it is hard to select altcoins since they are many as earlier noted.

Therefore, this article provides a list of 5 best penny cryptocurrencies to buy now which might go exponential in the second leg of the 2021 bull run with a potential of returning 10x-100x of their initial investment.

What are Penny Cryptocurrencies?

best penny cryptocurrency

Penny cryptocurrencies refer to digital currencies that can be bought at less than $1. They can be likened to penny stocks and are very cheap assets valued at just a few pennies. One of the major advantages of investing in such cheap cryptos is that they have a high profitability potential.

These cryptocurrencies are said to be one of the best investment options. They can be classified as follows:

  • Utility tokens
  • Security tokens
  • Mining-based cryptocurrencies
  • Stablecoins

It is important to note that the prices of most penny cryptocurrencies are highly volatile and are prone to price manipulation through pump and dump schemes. Nevertheless, all penny cryptocurrencies are not the same, as they differ widely from each other.

3 Reasons Why You Should Invest In Penny Cryptocurrencies?

If you are still wondering whether penny cryptocurrencies are worth investing, here are three solid reasons why you should buy penny cryptocurrencies today:

  1. Penny cryptocurrencies offer high-risk reward ratios: Many penny cryptocurrencies are undervalued, and with the potential of increased blockchain technology adoption, you can expect the value of these assets to rise exponentially in the near future.
  2. Penny cryptocurrencies offer investment diversification: If you want your crypto portfolio to generate constant returns you need diversification. The cryptocurrency market remains uncertain amidst the coronavirus pandemic and increasing regulation from various jurisdictions around the world. This coupled with the high cost of some of the cryptos, it would be wise to invest in different coins so that if one crashes, you may benefit from another one.
  3. Penny cryptocurrencies offer passive income: According to investment analysists, the best-paying dividend cryptocurrencies are mostly those valued under $1. Earning dividends from cryptocurrencies is the same as a stock dividend. Thus you can also earn money by just holding the penny cryptocurrencies in your exchange or wallet.

We these reasons, I hope you now see the value of investing in penny crypto currencies. The blockchain technology is here with us and it is not going anywhere. This simply means we are likely to see the emergence of more and more cryptocurrencies to invest it.

However, you must be careful before putting your money into such cryptos because of the limitations related to penny cryptocurrencies as discussed below.

3 Major Limitations of Penny Cryptocurrencies

As earlier indicated, altcoins vary in a number of ways and you can keep track on them using such factors as market capitalization and risk factors among others.

Penny cryptocurrencies are relatively risker due to the volatile nature of their prices. This risk increases exponentially particularly due to three main reasons: Liquidity, lack of information, and scams and rug pulls.

  • Liquidity: The 2021 bull run brought with it the launch of a number of meme tokens on DEXs (decentralized exchanges) without undergoing auditing, and with little liquidity. In addition, token distribution was skewed towards the project creators. As such, penny cryptocurrencies are usually subject to manipulation through “pump and dump” schemes. The best example was the pump and dump of Redcoin (RDD) which lost approximately 50% of its value in 6 months. The late John McAfee was accused of manipulative initiatives that affected digital assets including others like Verge (XVG) and Dogecoin (DOGE). Vincent McGonagle, the US Acting Director of Enforcement said:

“Manipulative and fraudulent schemes, like that alleged in this case, undermine the integrity and development of digital assets and cheat innocent people out of their hard-earned money.”

  • Lack of Information: Most penny cryptocurrency developers are anonymous individuals hiding behind pseudonyms. This is a major tenet of the cryptocurrency industry. Therefore, it is not easy to know what team is working behind the scenes making it even harder to gauge their intentions regarding the project. In addition, the projects have a tendency of skipping the audit stage which usually end up being scams resulting in loss of investor money.
  • Scams and Rug Pulls: A rug pull situation is where a project founder drains investors’ money out of the project and abandoning it leaving the investors high and dry. The 2021 bull run saw many blockchain projects experience rug pulls. Many of the projects crashed and burned with only SushiSwap recovering from the exit scam.

Even though the risks involved with penny cryptocurrencies are integral, the rewards often surpass the returns on Bitcoin, Ethereum and other altcoins.

Now, before we delve into the best penny cryptocurrencies to buy in 2021, let’s discuss the factors to consider before investing in penny cryptocurrencies.

10 things to Consider Before Buying Penny Crypto

It is important to have a structured selection process to follow when choosing the best cryptocurrency to buy. This helps to avoid confusion with the many coins currently available in the market. Here is a list of some of the factors to consider:

  1. Invest in a cryptocurrency that has a circulating supply of between 10 million – 1 billion coins
  2. The crypto’s market cap should be least $20 million and with more than $1 million in daily trading volume.
  3. Must be listed on the biggest cryptocurrency exchanges such as eToro, Coinbase, Binance, BitMex, Kucoin etc.
  4. Invest in a penny cryptocurrency that has mined at least 25% of their maximum supply.
  5. The crypto’s percentage gain in the last 7 days must be higher than 50%.
  6. It should have a high liquidity – minimum $1 million 24-hour volume traded.
  7. It should have a strong presence on social media (Twitter, Facebook, Reddit and cryptocurrency forums).
  8. There should be an experienced blockchain developers team behind the project. Understand their experience, mission, and plan to accomplish the mission.
  9. Learn about the underlying technology and the main function of the cryptocurrency. Whether it is intended as a ‘security token'( like a stock of a company) or ‘utility token’ ( coins redeemed for the services).
  10. The final factor to consider is the cryptocurrency community itself. Go through the various public sentiments and comments on various cryptocurrency public forums and talk sites.

An additional step which I have chosen to discuss as a stand-alone but equally important is ‘Study the Project/Cryptocurrency white paper.”  According to Cointelegraph, a White paper:

“…is a document which includes an outline of a problem that the project is looking to solve, the solution to that problem as well as a detailed description of their product, its architecture and its interaction with users.”

A White paper explains the purpose and technology behind the project. It usually provides diagrams, statistics and facts to convince potential investors to buy the asset.

Therefore, Whitepaper will let you know whether the project behind a penny cryptocurrency is legitimate and professional. Reading the White paper will help you understand how a crypto is different from others in the market.

5 Best Penny Cryptocurrencies 2021

Top 5 penny cryptos

After all the information I have shared comes the question, What are the best penny cryptocurrencies to invest in 2021.

While we are experiencing a bull market due to steady recovery of world economies from the effects of the Covid-19 pandemic, crypto traders should know the best opportunities and not to fall for pump and dump scams.

Following a lot of research, I have compiled a list of some of the best penny cryptos to buy this year and get huge returns.

  1. Dogecoin (DOGE)

Dogecoin or the ‘meme coin’ gained so much popularity that saw it being featured in the mainstream media. Dogecoin was created in 2013 as a joke and had the logo of a Shiba Inu dog. While the price of the crypto was uneventful for a few years, getting attention from influential personalities like Elon Musk saw it gain traction over the last three months or so.

It is currently listed as 7 of the world’s top most valuable cryptocurrencies with a market capitalization of approximately $36.64 billion according to Coinmarketcap. At the time of writing, DOGE is trading at $0.2799.

DOGE has enjoyed free promotional tweets and attention from Musk and other celebrities for some time. However, some other meme coins emerged and shared the attention with Dogecoin.

Capital at risk

  1. Stellar (XLM)

Stellar’s platform focuses on cross-border remittances and international payments. It is one of the leading cryptos with a daily trading volume of more than $531 million. It is currently listed as 22 of the world’s top most valuable cryptocurrencies with a market capitalization of approximately $8.1 billion according to Coinmarketcap. At the time of writing, XLM/USD price is at $0.3441.

Stellar is maintained by the Stellar Development Foundation (SDF), a non-profit organisation established in 2014.

Stellar’s main mission is to provide an open financial system that would provide people of all walks of life access to financial services. Stellar also aims at decreasing the cost and the time required for international money transfers, to create an equitable access to the global financial system. Some of the services offered by the stellar blockchain network are: mobile money, remittances, mobile branches, and micropayments among others. It also provides an excellent application that helps users convert crypto to fiat currency with ease.

Capital at risk

  1. VeChain (VET)

VeChain is a blockchain-based supply chain network designed to solve economic issues in the real world. The developers are committed to building an ecosystem that is dedicated to solving common problems in the supply chain industry. The platform offers two tokens: VeChain (VET) and VeThor (VTHO) tokens.

VeChain (VET) has a limited supply of 86.7 billion VET. On the other hand, VTHO is issued as a reward staking VET and transferring the accompanying value across the VeChain network. Consequently, the developers behind VeChain want to improve the affordability and efficiency of supply chains by giving more control to users.

Hence, if you are looking for the best penny cryptocurrency to buy, VeChain is a market leader and is worthy of your attention as a cheap crypto to invest this year.

It is worth mentioning that VeChain is supported by one of the top four biggest audit companies in the world, PricewaterhouseCoopers (PWC). VeChain also partners with several other FTSE 500 companies such as H&M, DNC, National Research Consulting Center (China), Yida China Holdings, BMW China and BitOcean, a crypto exchange, among others. VeChain (VET) is currently valued at $0.1213 with a market capitalization of approximately $7.82 billion and is ranked at #23. VET has rallied over 625% since January this year.

Capital at risk

  1. Basic Attention Token

This token makes the list of the best penny cryptocurrency to buy in 2021 as the technology behind it has one of the most useful projects in the whole cryptocurrency industry. It has the ERC-20 token utility and is created on the Ethereum platform.

It is currently listed as 87 of the world’s top most valuable cryptocurrencies with a market capitalization of approximately $1.2 billion according to Coinmarketcap. At the time of writing, BAT is trading at $ $0.8102.

The BAT decentralized blockchain-based exchange is used for digital advertising.

There is an excellent team behind the BAT team led by the Mozilla Co-founder and a JavaScript developer. The main aim of the BAT project is to transform the advertising industry by targeting three main stakeholders: advertisers, publishers, and users.

Another good thing about BAT is that the team behind it responds promptly to feedback from the BAT community, allowing for continuous improvement of their network. In addition, they make sure that they provide complete security and privacy to their users, assuring them that their adds will be seen and their needs efficiently addressed.

Capital at risk

  1. Ravencoin

This coin which was launched in late 2018 is relatively new and the technology behind it is aimed at becoming an Ethereum security token. Ravencoin has become popular of late due to the unique combination of the technical price action and positive fundamentals.

It is listed among the top 100 cryptocurrencies by market capitalization currently ranked at number 85 with a market capitalization of $1.25 billion according to Coinmarketcap. At the time of writing, RVN is trading at $ $0.1312. RVN has risen 512% over the last one year.

The  Ravencoin network is built for different uses and one of them is to flawlessly determine the ownership of assets.

Similarity to Bitcoin lies in its ability to be used for direct payments.

Capital at risk

Others

Other penny cryptocurrencies with a potential to record 10x-100x returns in 2021 are:

  • Ripple (XRP)
  • Zilliqa (ZIL)
  • Shina Inu (SHIB)
  • Decentraland (MANA).
  • The Graph (GRT).
  • Cardano (ADA)
  • Chiliz (CHZ)
  • QLink (QLC)

Where to Buy Penny Cryptocurrencies

You can buy penny cryptos through various crypto trading platforms, from individuals and through Initial Coin Offerings (ISO).

Here is the list of crypto exchanges where you can buy penny cryptos:

  • eToro – Gives you access to over 120 cryptos with an average volume of over $1.5 billion per day.
  • Binance: Is the largest cryptocurrency exchange in the world offering a huge selection of 685 coins with an average 24-hour trading volume of approximately $3.9 billion
  • OKEx: Gives you access to over 372 penny coins and an average daily trading volume of $1.9 billion.
  • HitBTC: Offers access to trading more than 827 penny coins and a $650 million average 24-hour volume.
  • Hotbit: Allows you to trade in more than 625 penny coins and a $2.3 billion average volume daily.
  • KuCoin: Allows you to select from roughly 447 penny coins and a $40 million average daily trading volume.
  • Bitfinex:. Allows you access to 277 penny coins with approximately $94 million average daily volume.

In conclusion, you now have enough information on the best penny cryptocurrencies to buy 2021. Penny cryptocurrencies expose you to innovative projects, diversification and last but not least the potential to make more than 100% returns on your investment. In some cases, using crypto robots for trading will allow you to save time by automating your trades, hence earning passive income.

Note that we cannot predict with 100% certainty what the best penny cryptocurrencies to buy in 2021 are. But, history tells us that as the cryptocurrency markets enlarge, it will multiply at lower rates. In addition, some of the cryptocurrencies we have now might disappear in the coming years.

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