Is It Worth Investing in Cryptocurrencies Priced Under $1?

For avid crypto enthusiasts in search of notable deals within the digital currency world, there’s heartening news: many leading cryptocurrencies are presently valued under $1. Astonishingly, certain assets have seen their market price dip as much as 80% below their historical peaks. At first glance, one might conclude these cryptocurrencies are unequivocal investment opportunities, right?

However, the reality may not be as straightforward as it appears. It warrants a more in-depth examination to ascertain whether investing in these sub-dollar cryptocurrencies is a judicious move at this moment in time.

XRP

Ranking as the seventh-largest cryptocurrency, XRP (CRYPTO: XRP) boasts a significant market capitalization of $27 billion. Currently, XRP’s value has depreciated by 21% within the year, trading at around $0.48. Its zenith of $3.84 was attained back in January 2018, yet during the last bullish surge in the crypto market, it failed to revisit those heights.

The pivotal factor impacting XRP’s future is the outcome of its ongoing legal tussle with the SEC. The SEC posits that XRP constitutes a security rather than a cryptocurrency, bringing forth profound implications for its existence.

Despite the regulatory headwinds, crypto optimists are confident that Ripple, XRP’s creator, will triumph in court and send XRP’s valuation soaring high. Nevertheless, one must acknowledge the substantial regulatory risk involved, including a potential $2 billion fine that the SEC might impose on Ripple. Thus, there’s no certainty that XRP will recuperate its former glory from over half a decade ago.

Dogecoin and Shiba Inu

Dogecoin (CRYPTO: DOGE) and Shiba Inu (CRYPTO: SHIB) both belong to the category of meme coins, detached from conventional financial analysis due to their speculative nature and negligible practical applications. Valuing these coins is therefore challenging.

Both have appreciated over 50% this year, which may seem less than astounding. Currently, Dogecoin is valued at approximately $0.14, while Shiba Inu’s value is a mere $0.00002.

Dogecoin and Shiba Inu are purely speculative meme coins, as seen in the accompanying image. Shiba Inu’s vast coin circulation of 589 trillion tokens makes the prospect of reaching $1 extremely implausible; such a valuation would result in a market capitalization of $589 trillion, far exceeding the worth of the entire S&P 500.

Dogecoin’s situation is similarly unpromising. Despite existing for over a decade and never breaching the $1 threshold, even with strong support from the likes of billionaire Elon Musk. Musk’s “The Dogefather” performance on Saturday Night Live couldn’t stop its value from plummeting by 80% since.

Cardano

Cardano (CRYPTO: ADA) once vied closely with Ethereum (CRYPTO: ETH), sharing similar blockchain foundations courtesy of Cardano’s co-founder Charles Hoskinson, who also co-founded Ethereum. Yet, Cardano has failed to live up to its initial potential and now appears to be falling behind emerging blockchain contenders like Solana. Add this to the uncertain stance of the SEC on whether Cardano is a security, and it’s easy to see why its price is struggling to surpass the $1 mark. With only minimal excitement around its recent forays into decentralized finance (DeFi), Cardano trades at just $0.42, having dropped 86% from its peak value.

Beware the crypto bargain basement bin

Here lies a cautionary tale: seeking superlative cryptocurrencies trading under $1 is akin to rummaging through a store’s clearance section for a steal. Often, you’re met with offerings that are either the wrong size or hue, or conceal some latent flaw not immediately apparent until later. Therefore, token trading beneath the $1 mark does not inherently signify a “steal.”

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Dominic Basulto has stakes in Cardano, Ethereum, and Solana. The Motley Fool holds positions in and endorses Cardano, Ethereum, Solana, and XRP. The Motley Fool’s disclosure policy is available to all.