What are some cheap cryptocurrencies to buy
A thousand coins for one euro - are cheap currencies really that cheap?
Lately there has been a preference for investing in cheap cryptocurrencies - but are coins and tokens under one euro really that extremely cheap? How much does the investor get for his “cheap” investment?
The last few weeks have been marked by an up and down in crypto currencies. Quite young tokens can rise well into the ten largest crypto currencies, only to then fall again by 66%.
One reason for this nervous market situation seems to be young investors who have a special focus on cryptocurrencies and tokens, the individual price of which is well below that of a Bitcoin. Currencies like Ripple, whose rate is currently in the single-digit euro range, are already expensive, investors seem to be interested in the crypto equivalent of Pennystocks.
This idea is understandable on the basis of emotional arguments: Some investors feel small when they can only afford a fraction of a bitcoin. Especially with the first investment, which may be in the range of 100 euros, it can be frustrating that you can't even buy a single coin from old currencies.
This focus on micro-currencies is additionally fueled by the hope of making millions with a small investment. "Bitcoin once only cost one euro and rose to over 15,000! That can also happen with Ripple / Cardano / Stellar / NEM / Tron? "
At first glance, the hypothesis that cheap coins are worthwhile cannot be denied. At least in the short term, the price increase is inversely proportional to the price of a coin:
The figure shows the average price increase over the last week depending on the price per coin or token. The data listed at coinmarketcap.com for all coins was accessed as a database. In order to check whether this image was only produced by segmenting the data volume, other segmentations of the data volume were also analyzed, but all of them come to similar results.
In summary, at least for the last week, cheap coins rise more than expensive coins. However, the investor should ask himself whether these price increases are sustainable or whether the hoped-for profit of 1,000% or more is really possible. How likely is it that a coin will experience such a price increase? To clarify this, it makes sense to consider cheap investment opportunities from two points of view, which are discussed in the following sections.
What kind of profit can you expect based on the current market capital?
The crypto currency Ripple is considered as the basis for the considerations of what maximum profits an investor could expect with an optimistic estimate. Is an increase to 15,000 euros even conceivable? If you look at the network fees - currently at 0.01 XRP - you would expect transaction fees of 150 euros speak. Even compared to Bitcoin, this would be absurd! To be fair, it cannot be ruled out that the fees will be adjusted accordingly. If the XRP price rises to 15,000 euros, one would speak of a market capital of almost 600 trillion euros based on the available supply. That is roughly fifty times the amount of money in the European Union!
Cryptocurrencies with very specific areas of application should be viewed even more strictly: Is market capital of several billion euros really justified for each project? Even more: Can we really speak of a sustainable value if this evaluation is in the pure concept phase, when only equity tokens are sold on the Ethereum blockchain?
So if you want to assess projects like Steem whether their fundamental value is, a comparison with the market capital of existing social networks is not wrong. For projects in the pure concept phase, it should also be taken into account which role the token will have in the long term.
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Are cheap coins really that cheap?
In addition, it should be considered how inexpensive inexpensive coins actually are. A Bitcoin is worth around 11,000 euros. With this bitcoin you own 59 ppb (parts per billion) of all existing bitcoins. So you own 59 billionths of the entire Bitcoin supply. That doesn't sound like a lot, but the same calculation applied to Ripple means that with a Ripple you only own 10 trillionth of the currently existing Ripple supply.
In order to compare the prices of all cryptocurrencies, it is therefore an effective way to ask yourself how expensive it would be to buy a corresponding portion of 59ppb of the total number of coins. One possibility for this is the so-called Bitcoin Price Equivalence or BPE for short. The following formula applies:
After calculating the BPE, it is still visible that Bitcoin is more expensive than all other cryptocurrencies, but Ripple's BPE does not differ dramatically from Bitcoin.
As can be seen from the table, the ten currencies with the BPE are all over 1,000 euros. In order to buy 59 ppb of the entire supply of a crypto currency, an investment of at least 1,000 euros is necessary for the currencies shown.
When investing in an inexpensive coin, it is therefore always necessary to ask what share the investor is buying in the currency and whether the project behind it can grow as hoped. Therefore cheap doesn’t always have to mean more!
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