Penny cryptos are arguably the most cyclical asset you can buy right now, which is why they have taken a steep downturn in the past year. However, buying the right ones at the start will likely generate hugely amplified returns when the market starts a strong recovery rally. Right now, most penny cryptos are trading at historic lows due to investors retreating to safer assets.
This is because when interest rates are high, people like putting their money in safer assets such as bonds and treasuries. But when interest rates get lower, they start looking for more exciting investments like penny cryptos, which can give more elevated returns. Even without a rate cut, the Federal Reserve’s bank “bailouts” have sparked a lot of excitement in the crypto sphere.
I believe the interest rate is at its peak already unless the next month’s inflation report shows hotter inflation. Thus, I see no more than one quarter-point rate hike, even if inflation stays a little sticky.
The Fed is also forecast to start cutting rates around the end of this year as inflation falls to near 2%. These rate cuts will coincide with the Bitcoin (BTC-USD) halving next year, which I believe will spark a new bull run in the crypto market.
With that in mind, the following three cryptos are the best bets in my book:
r/Cryptocurrency Moons (MOON)
r/Cryptocurrency Moons (MOON-USD) have been on a roll since I first wrote about it in November. The tokens are up over 230% since December 2022, on the back of successive positive developments, which makes me very excited about the future of MOONs. In my first column featuring this token, it did not have any utility other than being a reward token of Reddit’s largest crypto subreddit. That is indeed a strong suit and deserves a much higher valuation, but it was heavily diluted due to monthly distributions and “karma farming” on the subreddit.
However, things are much different now. The token has now shifted to the Ethereum main net, and it has a very strong use case. Advertisers can now rent the banner through this token, driving up demand. The subreddit currently has 3,800 users, and I believe the next crypto rally will encourage more users to join. That’ll make advertising much more compelling, increasing the token’s value even more. Moreover, Reddit may soon allow MOONs to be used for buying non-fungible tokens on its upcoming marketplace.
Of course, there is also the catalyst that MOONs could soon be listed on major exchanges. That is only a matter of time since it is a well-known crypto despite its small market cap. It already has around $335,000 in locked value. All things considered, this token is set to deliver outsized gains in the next rally and is already doing so.
Storj (STORJ-USD) is similar to Filecoin (FIL-USD) and offers blockchain storage. The difference is that Storj is less decentralized and uses the Ethereum network, while Filecoin uses its own ecosystem. With the cloud industry growing at remarkable rates, there is a great possibility of this growth spilling into crypto projects like these.
I believe Storj’s offering of a centralized platform will make it more popular with institutions and developers who seek support, while Filecoin’s decentralized network will be more popular with individuals. I’m bullish on both, but Storj is a great way to tap into the cloud storage boom if you are into low-cap tokens.
Nervos Network (CKB)
Nervos Network (CKB-USD) is an under-the-radar altcoin that is well-positioned for growth in the next rally. Despite being down 89% from its all-time high, this hidden gem offers efficient tokenomics and promising prospects. Nervos’ mission is to create a universal, internet-like public network that transcends blockchain interoperability, connecting almost every cryptocurrency asset and enabling seamless collaboration.
As a proof-of-work-based multilayer network and smart contract platform, Nervos has experienced steady development, launching its own EVM-compatible layer 2 and successfully completing its first hard fork. With partnerships like BuildClub, Axon’s upcoming launch, and Tempest Labs’ DeFi protocol, Nervos is set to foster a thriving ecosystem.
However, poor marketing has hindered the project’s growth. Despite this, Nervos Network’s unique position in enabling blockchain interoperability and recent backend developments suggest that when the next crypto bull market arrives, CKB could surge, delivering exceptional returns for investors.
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.
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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.