Monday, July 2, 2018

While Bitcoin's price rebounded 12% over the weekend, 800 cryptocurrencies now priced under a penny

Is it feasible to now compare much of the cryptocurrency sector as a 'penny stock' play?  That is certainly becoming a growing question as 800 cryptos now have fallen to the point where their price point is below .01.

Inevitably the majority of traders focus on top cryptos like Bitcoin, which itself rebounded over 12% this weekend to climb back up towards $7000 a coin.  However day traders like to dabble into lesser named and more volatile coins, and it seems now that nearly half the crypto market is relegated to price action in the penny stock range.

Cryptocurrency projects have been popping up left, right and center in the past 18 months, but over 800 of those are now dead, adding to comparisons between the current digital coin market and the dotcom bubble in 2000. 
New digital tokens are created via a process known as an initial coin offering (ICO) where a start-up can issue a new coin which investors can buy. The investor doesn't get an equity stake in the company, but the cryptocurrency that they buy can be used on the company's product. People usually buy into an ICO because the coins are cheap and could offer big returns in the future. 
There has been an explosion in ICOs. Companies raised $3.8 billion via ICOs in 2017, but in 2018 so far, this number has already shot up to $11.9 billion, according to CoinSchedule, a website that tracks the market. 
However, hundreds of these projects are now dead because they were scams, a joke or the product hasn't materialized. Dead Coins is a website that lists all the cryptocurrencies that fall into those categories. So far, it has identified just over 800 digital tokens that it considers dead. These coins are worthless and trade at less than 1 cent. - CNBC

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