Crypto Academy Season 2 Week 6 – Homework Post for @pelon53 | Penny Cryptocurrency

With the emergence of Dogecoin into the top 10 cryptocurrencies based on market cap, other penny coins have also had their share of growth. There are currently thousands of cryptocurrencies that fall into this category. In today’s article, we’d be looking in-depth at some penny cryptos, advantages and disadvantages of these cryptos and the best penny cryptos to buy in 2021.

---

Explain Penny cryptocurrencies in your own words. Advantages and disadvantages.

---

What are Penny Cryptocurrencies?

As the name implies, a penny is a small amount of money or the smallest unit of a currency. For example, in the past the smallest unit of the British Pounds was referred to as a penny. Well, it still is. With that in mind, a penny cryptocurrency is that one that it’s value is below a dollar, i.e. lesser than $1.

In order to buy a penny crypto, you only require a small amount of money. The are penny cryptos that when you buy with $10, you get millions of the tokens. That is because they are very cheap and are easily accessible. While they generally tend to fluctuate in price, there’s likely more appreciation with time. It’s easy to get x50 gains, than you can with a token that has a higher price.

Penny cryptos also fall into the broad altcoin category. As a result, attention is not given to most of the time. People simply look up the “big name” cryptos like ETH, LTC and BNB. While these the increase in price of these tokens are easily observed due to their high market cap, these penny cryptos are at times hidden like gems.

How to Find Penny Cryptocurrencies on CoinMarketCap

You can find penny cryptocurrencies on CoinMarketCap.

Simply click the filter button

Then click on +Add Filter

Select “Price”

Input the price range. You can use this price filter to find cryptocurrencies that are worth between $0.00001 to $0.9. That way you would exclude tokens that are worth below $0.00001 and above $0.9.

The list above shows the best 100 penny cryptocurrencies when the that price filter is used. From the image above, it can observed that Dogecoin currently leads the pack and followed closely by XLM, and both of them are about to breakout from this penny category.

Within the last year majority of the cryptos in the penny category have over 50x increase in price. That is a massive profit for anyone that have been holding those coins for a while.

Advantages of Penny Cryptocurrencies

• Capital requirements

When you want to purchase penny cryptos, a small capital is required. With a small amount of money, you can buy a huge quantity. In contrast, in order to make huge profits with higher priced cryptos, you need a sizable investment. Hence, penny cryptos are advisable if you have a small investment capital or for a percentage of your portfolio.

• Hedge against lost

When you have penny cryptos in your portfolio in can help save your entire portfolio during a loss. Hence, it is recommended to diversify one’s portfolio and include these coins worth a penny. When they go 10x or even 20x, that could be exactly what you need to save your portfolio.

• Profits

One reason many people invest in cryptocurrencies is because of the expected profits. And penny cryptos are more likely to produce a higher margin compared to cryptos that already have a high price. In the past months, celebrities and influencers have also contributed to the growth of the penny cryptos.

Disadvantages of Penny Cryptocurrencies

• Pump and dump schemes

There are many pump and dump schemes that parade themselves as genuine penny cryptos. There are times that the price are subject to manipulation and increased volatility. The founders could also rugpull the liquidity tokens that are provided if it is only listed on an AMM Swap. However, there also genuine projects that are worth every investment.

• Highly speculative

Penny cryptos are also highly speculative. At times it may be that you entered into the market at wrong time, or you may simply just be unfortunate. Since a measure of luck is required, the odds could also go against you. Hence, you may be forced to play the long-game for a token you want a quick gain.

• Exaggerated prospects

The prospects of the coins are also exaggerated by celebrities and crypto influencers. We can take Dogecoin for example, we see how Elon Musk often exaggerates the importance, even insinuating that it could be used in his ambition to go to space. While the link some penny cryptos have with popular names give it relevance, that does not amount to credibility.

Penny cryptos vs Regular cryptos

Are there any differences?

	Penny cryptos	Regular cryptos
Risk	Higher risk (more pump-and-dump schemes and scams)	Lower risk
Profit	Higher profits margin (it could go up to 100x)	Lower profits margin
Credibility	Often exaggerated by means of collaboration with celebrities	Less exaggeration, more work
Trading volume	Low	High
Volatility	High	Low

---

For you: What will be the best Penny to invest in in 2021? Explain and show evidence.

---

Best Penny Cryptocurrency to invest in in 2021

Before investing in a penny cryptocurrencies, it is important to look for one that doesn’t have other pennies drawbacks. Penny stocks are like rare gems, to find a great one, you have to review many to see the one that can give great profits.

As a rule of thumb, the trading volumes and liquidity is important when picking the best penny crypto to invest in. While the ones with good volumes may experience price fluctuations, they tend to survive during bear markets. Hence, during a bull run, selling about half of your holdings would be a risk averse strategy.

I would also advice that you do not simply follow the advice of crypto influencers as they are often paid to share sponsored ads as advice. Hence, a good penny crypto is not reliant on the advertisement carried out by influencers and celebrities.

From the criteria I just mentioned, TRX fits as the best penny crypto that a holder can buy.

Price	$0.075
Circulating Supply	71,659,657,369 TRX
Total Supply	100,850,743,812 TRX
Market Cap	$5,387,593,297
24h Trading Volume	$2,593,615,992
Market Dominance	0.38%
CMC Market Rank *	#24

The price above ($0.075) shows that TRX falls in the category of penny cryptocurrencies as it is currently below $1. The circulating supply shows how much is currently being traded. And from the total supply, we can see that there are not all TRX are in circulation. The trading volume is over 2 billion dollars, hence, there will be no liquidity problems.

While I’m not okay with the way TRX was originally distributed between the founder and investors, the project is gradually getting its attention. As a token for rewarding content creators, it tends to eliminate middlemen in the content creation phase.

If you’ve used BitTorrent in recent years, then you should know that it is now owned by Tron. I used BitTorrent in the past for downloading files, and not too long ago they also released their own penny token.

Tron also competes with Ethereum and Binance Smart Chain in the creation of DApps on the blockchain. Due to the low fees and fast transactions, developers are also building on the blockchain.

The TRX token is listed on Binance, KuCoin, Bitfinex, Poloniex, etc.

From the all-time chart above, it has increased over 5x from the period of January 2021 to May 2021. Due to the BTC crash them at affected all cryptos, TRX also experienced a correction. Nevertheless, all these show that Tron is one of the best projects to in right now.

---

Do a Ripple (XRP) analysis. Show screenshots. Would you invest right now? Explain.

---

Ripple (XRP) Analysis

XRP is a great crypto when you look at its price movements over the last few months. While it has a centralized governance, its growth shows the reception of traders. It is another top 10 crypto based on market cap. For a very long time, XRP was classified as a penny crypto. Despite it has crossed the $1 mark a number of times, it always still go back to cents.

From the chart above, the price of XRP which is currently at $0.981 is 2x the price it was in March. As at 22nd of March 2021, the price of XRP was $0.5. Let’s now do some technical analysis.

It can be observed that XRP is currently at support level with the price it was in 25th of April. Since it is is currently hanging on the support level, there is likely going to be a new price discovery. From 27th of April to today, XRP have had a resistance of $1.6. While it had tried to breakout of the resistance a couple of times, it has not been successful.

If the price of BTC should remain stable or recover from its current FUD, XRP is like to cross the $1.2, $1.5, and $1.6 short time targets. Then with a continuous run, we can expect a breakout at the $1.6 level.

Court Case

Since there is still a court case on XRP, there would be FUD from time to time. Just the way there’s FUD of China banning crypto during every bullrun, there’s likely to be a FUD during the uptrend of the token.

As a result of the court case, XRP was delisted from Coinbase. We can only expect that the crypto would be listed once again as soon as the case is over. And the announcement itself will lead to a surge in price.

With the current situation of things, if I wanted to invest in XRP, I would only invest half now since it is at its bottom, and invest the other half once the court has given a judgement.

---

Present in detail a possible investment of 5 penny crypto assets. Explain and present data confirming your choice.

---

5 Penny Crypto Assets

There are currently over 5 penny cryptos that I have been observing for months, but for the purpose of this article let’s take a look at just 5. Let’s say I invested $20 in each of them, then the total portfolio will be worth $100 dollar.

The 5 penny coins are:

• TRX
• DATA
• DOCK
• ARPA
• MFT

Those are the 5 penny cryptos that will talk about, while also looking at the data that back my investment on each of them. I tried to avoid pennies that are not listed on big exchanges, as they would often have a lower liquidity. I was almost tempted to include SHIB, but we can remember what happened as regards the dumping of the token by Vitalik Buterin.

• TRX

Price	$0.075
Circulating Supply	71,659,657,369 TRX
Total Supply	100,850,743,812 TRX
Market Cap	$5,387,593,297
24h Trading Volume	$2,593,615,992

TRX was included because it has price of $0.075 which is below the $1. The circulating supply of 71,659,657,369 TRX shows how much is currently being traded. And from the total supply, we can see that there are not all TRX are in circulation. The trading volume is over 2 billion dollars, hence, there will be no liquidity problems.

• DATA

Price	$0.07548
Circulating Supply	879,250,679 DATA
Total Supply	987,154,514 DATA
Market Cap	$66,366,411
24h Trading Volume	$4,798,538

DATA is an innovative project that uses blockchain technology to to build decentralised real-time data that aims to replace to conventional methods. That is one reason that the project appeals to me. It is also listed on big exchanges like Binance, Gate, Bitfinex, etc. Hence, there is much liquidity. In comparison with TRX, it has a far lower circulating supply but they are barely the same amount. Hence, the project is more likely to appreciate in value.

• DOCK

Price	$0.0475
Circulating Supply	686,914,993 DOCK
Total Supply	853,639,339 DOCK
Market Cap	$32,692,930
24h Trading Volume	$9,771,672

DOCK is a utility token on that is in issuing digital credentials developers and businesses use the Dock platform. The crypto is listed on many big exchanges, hence, it is very liquid. The circulating supply with respect to its price shows that there is still more room for growth.

• ARPA

Price	$0.0413
Circulating Supply	1,140,790,592 ARPA
Total Supply	1,500,000,000 ARPA
Market Cap	$47,071,891
24h Trading Volume	$18,265,405

ARPA is an innovative blockchain that developers can build dApps that help with data security and reducing fraud in transactions. This is a technology that can be impactful for everyday users. It is also available in tons of exchanges. It is currently undervalued, hence, the price will tend to appreciate even more.

• MFT

Price	$0.0111
Circulating Supply	10,000,000,000 MFT
Total Supply	10,000,000,000 MFT
Market Cap	$108,605,354
24h Trading Volume	$17,444,211

The project is currently being rebranded from MainFrame (MFT) to Hifi Finance (MFT). Hifi Finance is a lending protocol, where crypto enthusiasts can borrow cryptocurrencies. It is quite similar to JustLend that is on the Tron blockchain. As a utility token that serves a justifiable use, the token price could appreciate the more users the project garner.

---

Show an investment (starting at $ 5) that you have made this week in Penny cryptocurrencies. List the steps you took.

---

Investment in Penny Cryptocurrencies

Since I have already done the technical and fundamental analysis on TRX, I feel it only right that I trade it on the platform. TRX is available on Binance and Poloniex, the two exchanges that I use most of the time. Since there is a price limit on Binance, I would have to trade about $15 to buy TRX.

First, I search for TRX/USDT pair on Binance

Then, I purchased $15 worth of TRX tokens which is about 194.7 TRX.

The confirmed and waiting to be completed.

The trade is now completed.

TRX is now deposited in my Spot wallet.

Note: When penny cryptos are in popular exchanges is it much easier for traders to buy them.

Conclusion

While there’s some risk in penny cryptocurrencies, they tend to be very profitable. It is important that we conduct sentimental, fundamental and technical analysis before we buy any penny crypto. It is also best to buy those that are listed in an exchange, as those only available on AMM Swaps the developers can simply remove liquidity. Whether you are interested in profits in short-term or long-term, this is one form of investment that is recommendable.

Thanks to @pelon53 for the interesting assignment.

Images: This article contains screenshots that were taken for the purpose of visualisation.