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The turbulence in the market has caused big-cap cryptos to trade sideways for the past few months after significant selloffs, while most penny cryptos are sitting at record lows. This might be the perfect opportunity for risk-loving investors to take a position in these penny cryptos as their current cyclical trough provides room for significant upside.
Cryptos with low volumes and small market capitalizations are more susceptible to market downturns and scams. The standard deviation of these assets is in the extremes, and you shouldn’t invest more than 5% of your portfolio in any cryptocurrency. But some projects still have momentum and solid fundamentals that may pay off in the next crypto rally.
With that in mind, if you’re still hungry for more upside potential despite the risks, I recommend looking into the following five-penny cryptos.
Bitget Token (BGB-USD)
Source: insta_photos / Shutterstock
Bitget (BGB-USD) is a leading cryptocurrency exchange that has gained popularity due to its innovative trading services. Established in 2018, the platform currently serves over 8 million users in over 100 countries. It also aims to increase crypto adoption by partnering with credible entities such as Lionel Messi, Juventus, and PGL.
The exchange is among the best for those looking to trade crypto derivatives. Notably, Bitget is also the first CEX to launch copy trading tools. Bitget has never been hacked, and it founded a $300M protection fund to aid the market’s recovery after the FTX collapse. Additionally, the exchange’s native token, BGB, has performed exceptionally well and recently reached its all-time high.
Bitget offers a user-friendly interface and advanced trading tools. Its derivatives trading platform allows traders to take long and short positions on various cryptocurrencies, with a leverage of up to 100x.
The platform uses a multi-tiered security system, including two-factor authentication and encryption, to safeguard user funds and personal information. Most user funds are also stored in cold storage, which is offline and immune to hacking attempts.
Thus, considering its future potential and recent price action, I find it among the best penny cryptos to buy.
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Cheelee (CHEEL-USD) is a GameFi short video platform that lets users earn money from those watching their feeds. The project’s edge over its competitors is that it is not precisely a play-to-earn project but rather a watch-to-earn one. Short video platforms have been on the rise with the likes of TikTok, and the addressable market here is around 4.6 billion people, potentially leading to mass adoption down the line.
Moreover, unlike most other crypto-earning projects, CHEEL does not entirely rely on non-fungible token sales. The project sees 40% of its revenue coming from ads, collaborations, and investments, making it safer than most of its peers. Users can enter Cheelee without investment and get started with a free NFT case. Its game mechanics are designed to keep users engaged, and the option to watch for free makes me believe that the project is indeed sustainable.
With that in mind, this is a scalable and sustainable project among penny cryptos. I believe this project could capture more market share and return multi-bagger gains with solid development and marketing over time.
Source: PixieMe / Shutterstock.com
Terareum (TERA-USD) is a cryptocurrency project with various products: the TeraExchange and the Terapool launchpad. The TeraExchange is an exchange registered and approved to operate in the U.S., Dubai, and India, with plans to expand into the EU, South Korea, and South America. The exchange is set to launch in Q4 2022 and offers features such as debit cards, spot trading, and utilities like margin, futures, and staking. Additionally, the project plans to launch its bank and non-fungible token exchange.
Meanwhile, Terapool offers compelling launchpad fees for newer tokens and will attract new projects in the next cycle. There is also the Tera card, which could lead to integration with Google and Apple pay.
However, the most significant recent event was the project’s migration to Terareum V2 tokens. Holders of the previous TERA token were airdropped an equal dollar amount of TERA2 and now have the advantage of buying and selling their tickets without fees or taxes. It trades with a limited supply of 30 Billion Tokens and could be listed on top-tier exchanges.
Terareum also has its indigenous ecosystem, including its layer one proof-of-stake blockchain, under development. The project targets to launch the blockchain by Q3.
Terareum seems undervalued at this range, particularly among penny cryptos to buy, as it sets a reasonable high bar that may become a standard for Web 3.0 functionality.
Source: AIexVector / Shutterstock
Beldex (BDX-USD) is a privacy-focused crypto project catering to an expanding user base hungry for private censorship-free products. As Coinmarketcap reports, the project’s ecosystem consists of BChat, a personal messaging app; BelNet, a decentralized VPN service; the Beldex browser, an ad-free Web3 browser; and the Beldex privacy protocol, a cross-chain asset anonymizer.
The BDX token has declined since late-2021 in correlation with the rest of the crypto market. But a recent $25 million investment from Web3 investment firm DWF Labs piqued my interest, as it could soon reverse the momentum. DWF Labs’ acquisition will be primarily used for research and development, but the firm will also help Beldex market its applications to privacy lovers. Thus, there is excellent upside potential here.
“We are excited about Beldex’s ecosystem, which offers scalable and secure decentralized applications prioritizing privacy,” said Andrei Grachev, the Managing Partner of DWF Labs. “The BDX token is integral to this ecosystem, providing a secure means of payment and incentives for users to contribute. We believe that Beldex’s innovative solutions and focus on privacy and decentralization make it a strong player in the cryptocurrency space.”
Overall, the $25 million investment, earlier selloffs, and the additional marketing support mean the downside risk is relatively low for this penny crypto while offering significant upside potential.
At the caboose of this penny cryptos article is XRP (XRP-USD). It is among the top cryptocurrency projects, and may not fit the description entirely. However, XRP is one crypto I see as a likely multi-bagger since its lawsuit with the Securities and Exchange Commission has suppressed the price.
Of course, there’s no guarantee that XRP will win the case. Winning against the SEC is no easy task, but both parties have made their final arguments on whether or not XRP is a security. The outcome could make or break this project, and it is among the most high-risk, high-reward penny cryptos you can buy.
Conversely, the utility of this project is remarkable. Ripple’s technology is at the forefront of Central Bank Digital Currency development, and many big-name banks are using it to enhance their remittance gateways. Hence, the room for substantial upside or downside makes XRP similar to penny cryptos despite the large market cap.
Small, low-volume cryptos
On Low-Capitalization and Low-Volume Cryptocurrencies: InvestorPlace does not regularly publish commentary about cryptocurrencies that have a market capitalization less than $100 million or trade with volume less than $100,000 each day. That’s because these “penny cryptos” are frequently the playground for scam artists and market manipulators. When we do publish commentary on a low-volume crypto that may be affected by our commentary, we ask that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: How to Avoid Popular Cryptocurrency Scams
On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Omor Ibne Ehsan is a writer at InvestorPlace. He is also an active contributor to a variety of finance and crypto-related websites. He has a strong background in economics and finance and is a self taught investor. You can follow him on LinkedIn.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.