Investing in under-$1 cryptos takes an appetite for risk. That much is clear. The market is marked by volatility, evidenced by a market capitalization that has swung wildly up and down over the past few years.
Some investors have spent small sums of money only to receive strong returns. Others have invested small fortunes only to watch that capital peter out.
And while there is no doubting the risk, it also remains true that $1 is enough to buy many of the most popular and highest-capitalized cryptos. Thus, investors with a dollar and the patience required for a long-term outlook can win in this environment.
XRP (XRP-USD) hasn’t benefited from its SEC court case victory as much as many people expected.
That’s arguably been a massive disappointment. Investors got most of the gains immediately following the decision and it’s almost like it didn’t happen.
However, the victory was more than just a blip on a price chart. Sure, some shrewd investors got in and out quickly and doubled their money. And yes, those who didn’t sell on the news have seen their capital hardly appreciate at all. So, it’s hard to argue with those who are kicking themselves for not selling.
That said, XRP is better than it was simply for the fact that it now has more credibility than it did prior. A recent article highlights the fact that merchant adoption of XRP as a payment method has increased following the ruling.
That’s right, utility is increasing and utility is ultimately what will separate the crypto wheat from the chaff in the long run, making this one of the under-$1 cryptos worth watching.
Cardano (ADA-USD), like XRP and all other cryptos that have staying power, must ultimately find greater utility.
Fortunately, there’s good reason to believe that the developers of ADA will do so. Cardano’s development is governed by a reliance upon peer-reviewed research and evidence-based methodology.
When the company refers to this notion it means that major developments will be governed by implementing proven computer science research. I
t isn’t as much about the notion that developers will push for implementing real world utility. In other words, implement the science first and then expand network partnerships second.
Make no mistake though, Cardano is definitely being designed with utility heavily in mind. The enterprise section of its website sets out its thinking on utility and where it is going.
There is a grand design behind Cardano that is far less buzzword-dominated and much more rooted in economic reality than most other cryptocurrencies. That’s why it’s one of the under-$1 cryptos worth investing in even if the future is very murky at this point.
Polygon (MATIC-USD) costs around 60 cents and has significant potential. It is one of the better-structured layer 2 protocols available.
Layer 2 protocols are those that are built on top of existing blockchains intending to add functionality thereto. With Polygon, the base layer is Ethereum (ETH-USD).
So, Polygon improves Ethereum’s scalability, aka speeds and fees. Polygon has utility. Not so much in the sense of use cases, but in the sense that it improves the second most valuable cryptocurrency.
And if you can increase the speed of anything while reducing costs thereof value should follow. If the Ethereum network is faster then more developers will create DApps for the network. The same is true as network costs decrease.
Web 3 gaming companies have grown increasingly interested in Polygon recently. It’s impossible to say what that will lead to but it signifies another avenue for development and potential moving forward. That’s important because crypto, and Polygon, are still finding their footing.
Dogecoin (DOGE-USD) is the antithesis of utilitarian cryptocurrency. Most investors are well aware of that idea and regard Dogecoin as the joke it was designed to be.
I have no problem with that. I think investors have to make an exception for Dogecoin. It is the leading non-utilitarian cryptocurrency. I’ve said it many times but DOGE is simply a mechanism for odd, speculative behavior in the market.
It doesn’t have utility because it is money like some of its proponents argue. It has utility because it has established itself as the go-to brand for speculation when crypto behaves in difficult-to-understand ways. That happens often.
Dogecoin’s creators famously continue to malign cryptocurrency in general. Billy Markus recently said he likes Bitcoin and Ethereum and then compared DOGE to Bitcoin wearing a dog suit.
It seems like he’s trying to draw a very positive comparison between Dogecoin and Bitcoin after repeatedly calling DOGE a joke. Kind of confusing but it is a joke to be sure, just one that has carved out a strange utility in a volatile space.
IOTA (MIOTA-USD) may or may not be worth buying at $0.14 but it is at least worth considering.
IOTA has a goal of becoming the executing platform for transactions between IoT devices. It’s interesting though given the expectations surrounding the proliferation of IoT devices moving forward.
The underlying technology confirms transactions through a network of nodes. IOTA is insistent that its node structure differentiates it from blockchains in that it doesn’t have miners and therefore fees.
It’s essentially another iteration of the distributed ledger argument that favors the development of cryptocurrency overall.
The company also plans to extend its ledger technology into other use case areas. IOTA certainly is marked by a lot of hope and grand ideas.
No one knows where it’ll go but if it can actually integrate itself into IoT transactions there’s clearly a lot of money to be skimmed away. It’s an interesting proposition and there’s almost nothing else that you can buy in the real world that’s as cheap as IOTA so maybe it’s worth a shot.
Casper (CSPR-USD) is extremely inexpensive and trades for roughly $0.03. It traded for double that amount as recently as May. That’s probably the best argument in favor of Casper overall: It’s really volatile and gamblers might like it for that reason alone.
As an actual project, Casper is mostly a buzzword-filled project that has garnered little of a following at this point. The marketing of the project focuses on drawing favorable comparisons between it and other projects.
Casper relies on a proof-of-stake consensus. Thus, mining isn’t required and Casper notes it is 136,000% more energy efficient than Bitcoin. Casper also leverages the experience of its founders at large enterprises to draw parallels between its project and future enterprise utility. It’s a tenuous connection at best.
In short, I’m not really impressed by anything the company states or does marketing-wise. It’s a cheap gamble worth taking simply because it is so cheap. Nothing more, nothing less until it proves otherwise.
Arbitrum (ARB-USD) is another Ethereum Layer 2 scaling solution. Therefore, it promises to increase transaction speeds and reduce fees across the Ethereum network. Those goals are inherently valuable and if Arbitrum can be successful, its value will rise as well.
Arbitrum is also focused on Layer 3 solutions, which are those that enable developers with fluency in computer languages, including Rust and C++ to further develop Arbitrum’s network. The goal is to launch its Layer 3 solution called Orbit this year.
One of Arbitrum’s strongest assets is its leadership team.
OffChain Labs is the name of the group headed by three former Princeton University researchers with deep experience in computer science. OffChian Labs is leading the development of Arbitrum.
So far, the group has been proficient at raising capital for the project. It suggests a strong network of institutional backers for the project which is often the difference between success and failure.
On the date of publication, Alex Sirois 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.