Do your personal research on penny cryptocurrencies
I would like to say penny cryptocurrencies are a comfortable environment for beginners in the world of cryptocurrency. As a newcomer, advantages are higher than the disadvantages when turning around the penny cryptocurrencies.
image source (pixabay.com) Penny Cryptocurrencies
Penny cryptocurrencies have a low price value below one dollar, making it possible to hold a huge amount. Advanced traders will call it shit coin but they know the upside potential of these coins. Penny coins can make you wealthy if you pick the right at the perfect time.
The question now should be, Should I invest in penny cryptocurrencies? That will depend now on you, but have it in mind that these coins can change your financial standard forever. You can invest in 10 penny coins today, 7 will be worthless but two or more can double the value you invested. Note that the Big guys today (BTC, ETH, LTC) were one-time penny cryptocurrencies, and now that time is over for them. So now let's talk about what is available now. There are thousands of penny cryptocurrencies in the market today, and picking the right one is where the problem is.
What to look at when investing in Penny Cryptocurrencies
- Fundamentals
It must have the fundamentals of the cryptocurrencies in question. For example:
Bitcoin was created to take care of payment(peer-to-peer) systems without an intermediary.
EThereum was created to provide a blockchain platform to run projects and not just cryptocurrencies.
So when I talk about fundamentals, I mean looking at the project being able to solve real-world problems. The question now is, what is the purpose of the penny coin you are about to invest in?
If your penny coin has no purpose, forget about it and move to the next. I said above, you can invest in 10, 7 worthless, and two-three can double. This is because more than one coin might solve one problem with a different solution. So it is all left to you to pick who will beat the other, so long it is a real-world problem, One solution will fit in.
- Pump and Dump
Next to look into is what traders call Pump and Dump. It is a situation where an artificial increase in asset value is created and sold to make a profit. This action is not legal in the traditional stock market, but common in the crypto markets since there are no regulations around it. As we have a good number of new penny cryptocurrencies day by day, it is easy to find ourselves in pump and dump situations since it is easy to manipulate penny coins due to their low values.
A pump can be spotted in the market when a trader with huge assets influences the market. It is not that easy to spot a pump since you don't have details to be sure it is a pump. So if you happen to get yourself into such a market, there is nothing you can do at that point.
So the only thing to do when a penny of cryptocurrencies suddenly shoots up is to stay away, it might be a Pump and Dump scheme. Don't be tempted with the opportunities of the pump and dump like you are just paying the price for others to take profit.
Shitcoins
I did mention, some advance traders call penny cryptocurrencies shitcoins. This is because most of these coins are launched to make money and not to solve real-world problems. Some characteristics to identify these coins are;
- No official website when to get more information
- No whitepaper for detailed information about the project
- No clear roadmap on the problem the project is about to solve
- The project team stay anonymous for no reason
- No official social media profile for both company and project
- The project is known by just a few people
Conclusion
Well, Penny cryptocurrencies are a cool playing ground but it is better safe than sorry. Take time to research any coin you want to put your penny on. Avoid random information from people because these people might not also have good information about the coin.
My take back will be Don’t put your money on any penny cryptocurrencies which you are not ready to lose.
To join the crypto market, you need to be able to stay calm when the market seems overwhelming. If it is not going your way, take your time to analyze and find out what is happening before taking any action.
Disclaimer: This is not a piece of trading advice, do your research before making any decision in the market.
Cheers
Thanks for dropping by
@fombae
