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Cheap cryptocurrencies that could explode: Is it worth the investment?

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Cheap cryptocurrencies that could explode: Is it worth the investment?

The search for the cheapest cryptocurrency that will explode in 2024 is gaining momentum. What factors drive this interest, and could the approach prove fruitful?

The collapse of several major crypto firms, including FTX, Celsius Digital, BlockFi, and Genesis Global, dampened the appetite for crypto investments in the last couple of years. However, a recent upturn in the crypto market, spearheaded by the approval of spot Bitcoin exchange-traded funds (ETFs), has reignited interest in digital assets.

Numerous aspiring investors are looking at more than just leading cryptos like Bitcoin (BTC) and Ethereum (ETH), especially given that their prices may be beyond the reach of many. Therefore, the question of the best cheap crypto coins that will explode has become more prevalent. 

Often called ‘penny cryptocurrency,’ the allure of crypto under $1 lies in their potential for exponential growth. For instance, if a cryptocurrency is priced at $0.01 and rises to just $1.00, that would represent a 100x return on investment (ROI).

Of course, it is not an exact science, and given crypto’s inherently volatile nature, finding the cheapest crypto that will explode is an exercise fraught with risks. 

With that in mind, let’s delve into the factors surrounding the desire to find cheap coins and how such an approach could benefit investors, especially with the market showing signs of an upcoming bull run.

Reasons for investing in cheap cryptocurrencies

The main reason to look for small crypto to invest in is the potential for high returns. As mentioned above, even a slight price increase can lead to substantial profits. 

Such an approach may be particularly appealing to investors with a high tolerance for risk who would be willing to bear the notorious volatility of the digital asset market in exchange for the prospect of substantial monetary gain.

Another reason for gunning for low-priced cryptocurrencies is that they offer an effective means of portfolio diversification. Apart from allowing investors to spread their funds much wider than if they had put their money in the bigger, more expensive cryptocurrencies such as Bitcoin, cheaper altcoins have historically shown a low correlation to traditional asset classes such as stocks and bonds.

Analysts attribute this low correlation to the unique factors influencing crypto prices, including technological updates, regulatory news, and market sentiment, often distinct from the factors that impact traditional financial markets.

It makes them potentially excellent tools for spreading risk across different types of investments, a factor that could enhance portfolio performance during unstable market conditions.

Perceived risks of investing in cheap cryptocurrencies

Despite their attractiveness as an investment option, low-cost coins come with several risks and limitations, including:

Market volatility: Cryptocurrencies, whether cheap or highly-priced, are known for their extreme price volatility. The dynamic nature of digital assets often translates into rapid and significant price fluctuations. We’ve seen coins experience sharp increases in the past, driving investors into a buying frenzy with hopes for substantial returns. 

However, we have also seen those soaring prices tumble just as abruptly. Therefore, investors interested in exploring this sector should be aware of these price swings and be ready to face the potential losses they may entail.

Insufficient regulation: Since coming to the fore, the crypto market has been characterized by a lack of significant regulatory oversight.

While it has been a vital factor in crypto’s rapid expansion, the absence of stringent regulations presents potential challenges. 

It has created fertile ground for market manipulation strategies, including ‘pump and dump’ schemes, where certain groups or individuals artificially inflate a token’s price for personal gain, only to sell off their holdings once they have enticed other investors to buy, resulting in a steep price drop.

Additionally, a shortage of comprehensive regulations opened the door for unethical practices such as insider trading, which may affect a coin’s stability.

Liquidity risks: This refers to an investor’s potential difficulty when buying or selling a low-priced digital asset without affecting its price. Cheap cryptocurrencies are often more susceptible to liquidity risks because they typically have fewer buyers and sellers, making it harder to trade them without impacting their price.

Technological risks: While the blockchain technology underpinning crypto is deemed more secure than the traditional financial system, there are still a few issues. These include potential security vulnerabilities that could lead to a loss of investment.

Current and future market trends

Since its invention, Bitcoin has been the most dominant cryptocurrency in the market. At one point, it comprised approximately 90% of the crypto market capitalization. 

Currently, its market share stands at 49.78%, but between 2017 and 2022, data shows that the top 100 coins outperformed it by over 75% annually.

While not at Bitcoin’s level, several low-cost cryptocurrencies, including Ripple (XRP), Cardano (ADA), Dogecoin (DOGE), and Polygon (MATIC), have carved out a space for themselves in the digital asset market. These cheap altcoins have gained traction, attracting users with lower transaction costs and specialized applications.

Analysts suggest that as the cryptocurrency market matures, the diversity between altcoins could become a key strength, disrupting the historical correlation often seen between Bitcoin and cheaper cryptocurrencies.

Furthermore, regulatory developments could significantly impact the crypto market going forward. The US Federal Reserve’s potential pivot to interest rate cuts by mid-2024 could alleviate pressure on the crypto market, making less expensive digital assets more attractive to investors.

At the same time, recent legal victories for XRP and Grayscale may pave the way for increased institutional investment in small cryptocurrencies.

However, market watchers have urged investors looking to add cheap cryptocurrencies to their portfolios to factor in prevailing macroeconomic conditions such as the Fed’s interest rate hikes since March 2022, which, while aimed at curbing inflation, have also made riskier assets such as crypto less attractive.

Identifying promising, cheap cryptocurrencies

When identifying cheap crypto to buy, conducting thorough market research is crucial. Here are some key factors to consider:

Market capitalization: This refers to the total dollar market value of a cryptocurrency’s circulating supply. It is calculated by multiplying the total supply of coins by the current price of a single unit. 

According to experts, higher market caps can indicate stability and less risk. However, lower-cap coins may offer promising prospects for growth.

User adoption: Experts advise those looking for a small crypto to invest in to keep their eyes on those with wide user adoption or who show signs of growing adoption. 

Investors can gauge this by the number of active wallets, transaction volumes, and partnerships with other reputable organizations.

Development activity: Cheap coins from projects with regular updates and active development may make for a better investment. Investors can check a project’s GitHub repository to learn about such activity.

Community engagement: Regardless of price, potentially successful cryptocurrencies will be backed by vibrant communities. It is advisable to check social media platforms like Reddit, X, and Telegram for active discussions and activities related to a coin or project.

Cheap cryptocurrency to invest in 2024

XRP (XRP)

XRP is relatively stable and boasts a solid use case, facilitating transactions on the Ripple network. With a market cap of $36.9 billion, XRP is currently valued at $0.6749 per unit, making it a pretty promising crypto under $1 in the top 100. 

Cheap cryptocurrencies that could explode: Is it worth the investment? - 1
XRP 30-day price chart | Source: CoinGecko

Although there are no guarantees that XRP’s price will spike any time soon, its current level means even small upticks could reflect large profit percentages.

Cardano (ADA)

Currently priced at $0.7449 and with a valuation of $26.4 billion that ranks it at #8 on the crypto market cap list, ADA remains one of the cheapest altcoins, even more so now as the crypto space recovers from the slump triggered by a lengthy bear market.

In the last 30 days, the value of ADA has risen 37%.

Cheap cryptocurrencies that could explode: Is it worth the investment? - 2
Cardano 30-day price chart | Source: CoinGecko

ADA has a vibrant community, a strong development team, and numerous use cases, including staking on the Cardano network and transacting on decentralized apps built on it.

The network has rolled out two significant updates to boost its performance and user experience. The Vasil update, released in 2022, introduced vital features that improved how transactions are processed, allowing for more transactions to happen simultaneously and making the validation process smoother. 

On the other hand, the Alonzo update in 2021 enabled various crypto applications, like non-fungible tokens (NFTs) and smart contracts, thus broadening its ecosystem.

Predictions regarding Cardano’s value in the future hold a mostly optimistic tone, with analysts expecting steady growth.

Dogecoin (DOGE)

DOGE is ranked #9 on the crypto market cap list. At the time of writing, it had a fully diluted valuation of $23.82 billion, with each coin priced at $0.166. 

More than 4 million people reportedly own the meme coin, and its presence on social media is not to be sniffed at either. The r/dogecoin subreddit group on Reddit boasts more than 2.5 million members. At the same time, the coin’s official X page has 3.9 million followers, making it one of the largest and most active communities in the crypto space.

Additionally, Dogecoin has constantly received good press, spearheaded by celebrity endorsements, including X owner Elon Musk, rapper Snoop Dogg, and Kiss frontman Gene Simmons.

Cheap cryptocurrencies that could explode: Is it worth the investment? - 3
Dogecoin 30-day price chart | Source: CoinGecko

Looking at the chart above, the meme coin’s price is currently up 142.7% from last year and has jumped 96.9% in the last 30 days and 66.2% over two weeks. It means that for anyone looking for cheap crypto that will explode in 2024, DOGE wouldn’t be a bad bet to keep an eye on.

Final thoughts

Investing in low price crypto entails a substantial amount of risk; therefore, it is advisable to proceed with caution. 

Expert advice for building a strategy that protects you while allowing you to make profits includes diversifying your portfolio across different coins and price ranges, doing your own research, staying informed and up-to-date with news and developments in the crypto market, using trusted platforms, and only investing what you can afford to lose.