Penny cryptocurrencies have popped back into the spotlight lately as cryptos not named Bitcoin have gotten off to a strong start in 2020.
Taking Bitcoin out of the equation, cryptocurrencies as a group are up 31.6% so far this year. That's raised the possibility that we could be in the early stages of a new "altseason" when non-Bitcoin cryptos see big gains.
The last altseason saw astounding gains.
Collectively, non-Bitcoin cryptos rose 24,740% from January 2017 to January 2018. Individually, many cryptos – particularly penny cryptocurrencies – had even bigger gains.
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But the cryptocurrency markets tend to follow Bitcoin's lead. And when the Bitcoin price started to tumble after reaching its all-time high of nearly $20,000 in mid-December 2017, the rest of the crypto market tumbled along with it.
Most cryptocurrencies lost 75% to 95% of their value in the "crypto winter" that followed. Last year, crypto prices rose in the spring as Bitcoin rallied, but they ended almost where they started.
That means cryptocurrencies are trading at bargain prices now.
So we decided to look at today's best penny cryptos with the goal of finding those with the most potential.
But before we do that, here are a few basic things you need to know…
What Is a Penny Crypto, Anyway?
Unlike penny stocks, penny cryptocurrencies aren't necessarily obscure, thinly traded coins. I consider any crypto that trades for less than $1.00 to be a penny cryptocurrency.
Case in point: XRP is the No. 3 cryptocurrency by market cap. It's one of the oldest and best-known alt-currencies, created by a company called Ripple in 2012. But it currently trades at just $0.23.
In fact, about half of the top 100 coins listed on CoinMarketCap.com are penny cryptocurrencies.
Another important thing to know is that the supply of a cryptocurrency plays a big role in its price relative to other cryptos.
The supply of a crypto is the total number of coins either created at its launch (known as a pre-mine) or designated to be created over time through some sort of digital mining process.
The total supply of Bitcoin is capped at 21 million, a relatively low number. That's one reason the price of Bitcoin is so much higher than the price of other cryptocurrencies.
The current supply of XRP, on the other hand, is 43.6 billion – and the eventual total supply is planned to top out at 99.9 billion. That's 4,761 times as many XRP than Bitcoin.
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It's common for penny cryptocurrencies to have a supply in the billions or tens of billions, though some have supplies in the hundreds of millions.
Other components driving the price of a cryptocurrency include its utility; how well it solves such issues as privacy, security, and scalability; and the quality of its developers (the people working on the project).
With that in mind, we looked at the top 100 cryptos by market cap and selected the 10 best penny cryptos for 2020…
The 10 Best Penny Cryptocurrencies to Buy Now
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.