The crypto market experienced significant selloffs last year, with many new projects sitting at historical troughs. That said, buying these penny cryptocurrencies with high utility and a large addressable market right now is a golden opportunity for the following reasons.
The first is the Bitcoin (BTC-USD) halving in 2024, which should positively impact the supply and demand of BTC, increasing the value of the entire crypto market. The second is the Federal Reserve’s plan to soften its monetary policy, stimulating cyclical assets such as cryptocurrencies. There has been a slight recovery this year, but most projects still offer an ideal entry point for investors looking to hold for long-term gains.
Moreover, adopting central bank digital currencies (CBDCs) could further legitimize cryptocurrencies and increase demand for all tokens, leading to improved infrastructure and regulatory support for the crypto market.
Of course, penny cryptocurrencies are more susceptible to market downturns and scams, and investors should not invest more than 5% of their portfolio in any cryptocurrency.
If you are willing to take on this risk for higher gains, look into these three penny cryptos.
r/Cryptocurrency Moons (MOON-USD)
The r/Cryptocurrency Moon (MOON-USD) token has doubled since I first wrote about it last year. This is due to a few catalysts, such as the move to the Arbitrum Nova mainnet, burning Moons by selling banners on the subreddit to other projects, and the recent crypto rally increasing the subreddit’s traffic. In the next major rally, this token could be a multi-bagger as subreddit users can buy memberships and GIFs and stake it to provide liquidity on Sushiswap (SUSHI-USD). Moons’ total value locked (TVL) also reached $350,000 on Sushiswap.
Moreover, its relevance is supported by the growing members of the subreddit. As Reddit remains one of the most influential social media platforms, the token will likely remain relevant for a long time. The token could also gain more value once Reddit goes public and the crypto market turns a corner.
It is important to note that the Moon token is not a utility token and does not have full-time developers. Instead, its value relies primarily on the popularity of cryptocurrencies. Nonetheless, with the potential for significant exchanges to list the token and the continued growth of the subreddit, it is one of the surefire penny cryptocurrencies to consider right now, in my view.
Nano (XNO-USD) is steadily climbing upward after reaching a low of 59 cents. This cryptocurrency project offers fee-less and near-instantaneous payments. Unlike other blockchains, Nano’s block-lattice architecture makes it highly-scalable, providing a user-friendly experience for those new to crypto. However, Nano’s lack of smart-contract functionality limits its utility outside of being a payment system.
The best catalyst for Nano is the growing adoption of crypto as a payment method. As centralized exchanges face scrutiny, and users cannot transfer most cryptocurrencies for free, Nano could become a top choice for gas-less payments.
Conversely, Nano’s bad marketing has held it back. But if crypto becomes a mainstream payment method, Nano’s unique architecture and user-friendly experience could make it the biggest beneficiary of that trend.
Paxos Gold (PAXG-USD)
Paxos Gold (PAXG-USD) stands out from most cryptocurrencies, which are not backed by real-world assets. This gold-backed cryptocurrency project has gained popularity among investors seeking access to gold without the means to buy gold physically. As per Coinmarketcap, each PAXG token is backed by a fraction of a piece of London Good Delivery gold bar, stored in Brink’s gold vaults, the approved storage company by the London Bullion Market Association.
PAXG also has little to no price correlation with the rest of the crypto market, which means it is not affected by flash crashes that could wipe out a substantial portion of the market capitalizations of other cryptos. Additionally, PAXG tokens run on the Ethereum (ETH-USD) blockchain, which provides investors with an added level of security.
With all that in mind, PAXG is one of the safest penny cryptocurrencies to hold for the long run. But the catch is that there’s little short-term upside potential, and ETH fees can be a hassle if you’re buying small amounts at a time.
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.