Crypto Academy Season 2 Week 6 Homework Post for (@pelon53) - Penny Cryptocurrency

Hello Prof. @pelon53, here is my homework post.

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

Penny cryptocurrencies are cryptocurrency coins that are currently trading under a market price of $1. They are very cheap coins and are only worth a few pennies. They are highly volatile and fluctuates very often.

One of the most popular cryptocurrencies is Dogecoin, which has a current price of 0.4112 according to coinmarketcap. Some other penny cryptocurrencies are TRON (TRX), Siacoin, SHIBA INU.

^{screenshot from coinmarketcap}

Advantages of penny cryptocurrency

• Investing in penny cryptocurrencies does not require large sums of money. Profits can be made with small investments unlike in cryptocurrencies such as Bitcoin, Ether, Ripple.
• It boosts the profits of portfolios. A good rise in the value of a penny cryptocurrency among other cryptocurrencies in the portfolio could help traders profit from the portfolio if the other cryptos in the portfolio are falling in value.
• Due to their low market price, investors with low capital have the opportunity to purchase a penny cryptocurrency to make a profit.

Disadvantages

• They have low market liquidity and low market capitalization which makes them very unpredictable
• They are likely to have price reversals. Traders holding the penny cryptocurrency could lose all their investment.
• Fluctuation of penny cryptocurrencies is very high. They are affected the most if there is a downward trend in the market.

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

According to The CryptoStaunch In selecting good crypto to invest in, some criteria should be considered.

• At least 25% of the supply limit of over $10million coins should be mined already.
• The penny cryptocurrency should have over $20million of market capitalization and also have liquidity of at least $1million daily trading volume.
• The penny cryptocurrency should be listed on some of the popular currency exchanges.
• It should have a percentage gain of more than 50% for the last seven days.
• It should be active on social media with news of its development.

For me, the best cryptocurrency to invest in is Stellar (XLM). It fits all the above criteria.

As seen from the screenshot below, stellar has a current price of $0.493 which is under $1, and therefore qualifies as a penny cryptocurrency. The market capitalization of stellar is currently at $11,355,104,010.6 which is also higher than the required $20million in market capitalization and also has a trading volume (24hours) of $2,843,462,344.29

^{screenshot from coinmarketcap}
It is ranked 17th on coinmarketcap.
Stellar has a total supply of 50,001,803,188.54XLM which is more than the required supply limit of 10million coins

To fit the criterium of activity on social media, Stellar is present and very active on Twitter and other popular social media platforms.

The screenshot below shows some historic price movement of Stellar

Stellar (XLM) fits all the criteria for a good penny cryptocurrency that is why it chose it as the best penny cryptocurrency to invest in.

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

Ripple (XRP) is ranked 6th on coinmarketcap with a current price of $1.16 and $55,547,086,407 market capitalization. It is a centralized cryptocurrency.

I will be using fundamental analysis to analyze the price of XRP.

^{screenshot from coinmarketcap}

There is a strong resistance at $1.9728 which was at around April and has not been broken yet. If the resistance is broken, it will be easy to set a new higher price.

Why I would invest in Ripple.

• Ripple is facing a legal issue and has been delisted from coinbase. If the case turns out well in favor of Ripple, it will be relisted and that might increase the price significantly.
• Winning the court case itself has the potential of boosting the value of Ripple.
• Based on the fundamental analysis, the price is currently at the support zone and Ripple may rise in value soon.

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

I bought 5 penny cryptocurrencies in my virtual account and made a $500 investment, $100 for each. I plan to invest for a year and check the portfolio every two months, which is 6 times a year, to see where I am getting good returns.

I chose to invest in Dogecoin (DOGE), Stellar (XLM), Tron (TRX), SHIBA INU (SHIB), and BitTorrent (BTT). I selected those coins based on the criteria I listed earlier.
• Good market capitalization and daily trading volume.
• It should be listed on popular exchanges
• The crypto should be very popular and recognized on social media.
• It should have more than 50% gain per week.

DOGECOIN

Dogecoin is one of the popular penny cryptocurrencies. It is ranked 7th on coinmarketcap based on a market capitalization of $51,294,123,339 and a 24hour trading volume of $9,326,463,548. Following the support from Tesla Motors CEO, Elon Musk, it became very popular.

tweet by Elon Musk claiming to be the Doge father

It is listed on cryptocurrency exchanges such as FTX, Poloniex, Binance, Uniswap. Based on the analysis, it has the potential to rise significantly in value.

SHIBA INU (SHIB)

It is ranked 35th on coinmarketcap. It is backed by a strong community and also backed by Elon Musk. It became very popular and rose in value when there was an announcement that it will be listed on the innovation zone on Binance.

It has a good market cap and daily trading volume of $3,721,802,264 and $1,777,767,960 respectively. I am looking forward to making great returns from it.

BitTorrent (BTT)

It runs on the Tron network and among the top 50 coins. It is 46th with a market capitalization of $3,007,515,325 and a 24-hour trading volume of close to $1 billion. It is listed on Binance, poloniex, Kucoin.

STELLAR (XLM)

It can be seen from my previous explanation of Stellar that it fits all the criteria of a good penny cryptocurrency. It has a good daily trading volume and market cap. It is also very popular in the trading community.

TRON (TRX)

Tron is a good cryptocurrency that also fits all the criteria of good crypto. It is among the top 50 coins with a good trading volume and market cap. It has over 970 thousand followers on Twitter which shows how popular the coin is.

It is listed on Poloniex, Binance, and other popular exchanges.

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

I logged into my Binance account and clicked on wallet then chose fiat and spot.

I searched for Dogecoin and waited for it to load then I selected buy

Then I entered the amount I wanted and clicked on buy DOGE and the order was placed

Conclusion

Penny cryptocurrencies are very volatile and the risk associated with them needs to be well considered before deciding to invest. Seek help from experienced traders if you don’t have sufficient knowledge in trading and use the capital you have to spare.

Thank you.