If you're looking for potential bargains in the cryptocurrency market, the good news is that a surprising number of the most popular cryptocurrencies are trading for less than $1. In fact, some of them are trading at discounts of up to 80% compared to their all-time highs. At first glance, that would seem to make them buy out loud, right?
The answer is not as obvious as you might think. Let's take a closer look to see if any of these cryptocurrencies that are trading for less than $1 right now are worth buying.
XRP
XRP (CRYPT: XRP) It ranks as the seventh largest cryptocurrency, with a massive market capitalization of $27 billion. However, XRP is down 21% on the year and is trading at just $0.48 right now. At one point, XRP was trading as high as $3.84, but that was in January 2018. During the previous cryptocurrency bull market rally,
While XRP has several potential catalysts, the only one that really matters right now is the resolution of its long-running court case before the SEC. According to the SEC, XRP is a security, not a cryptocurrency, and that has obvious existential implications.
That said, crypto bulls firmly believe that Vibe (the creator of the XRP token) will emerge victorious, causing the price of XRP to skyrocket. That may be true, but it is also taking on a huge regulatory risk. Don't forget: the SEC is looking to impose a gigantic $2 billion fine on Ripple. Even if Ripple wins the case, it may still owe a lot of money. Therefore, there is no guarantee that XRP will regain its charm from more than six years ago.
Dogecoin and Shiba Inu
Both Dogecoin (CRYPT: DOGE) and Shiba Inu (CRYPT: SHIB) are coins memes, which basically means that they are completely disconnected from the world of fundamental financial analysis. As meme coins, they have little to no utility and there is no good way to value them.
While both meme coins are up more than 50% over the year, that's not as impressive as it sounds. Dogecoin is trading at just $0.14 these days, while Shiba Inu is trading at the ridiculously low price of $0.00002.
While Shiba Inu has been taking some steps to add utility to blockchain users, it suffers from a huge coin supply. There are 589 billion Shiba Inu coins in circulation, so the mathematical chances of this cryptocurrency reaching the $1 level are almost zero. A price of $1 would imply a market capitalization of $589 trillion, which is approximately 15 times greater than the current value of the S&P 500!
The prospects for Dogecoin are not much better. This meme coin has been around for over a decade and has never, ever surpassed the $1 mark. This is despite the fact that billionaire Elon Musk has been a prominent supporter of this currency. During the peak of meme coin popularity in 2021, Elon Musk even appeared during a comedy sketch on Saturday night live like "The Dogefather." Unfortunately, Dogecoin's value has decreased by 80% since then.
Cardano
Finally, there is Cardano (CRYPT: ADA)which was once a close rival to Ethereum (CRYPT: ETH). The two cryptocurrencies share much of the same blockchain DNA, as Cardano co-founder Charles Hoskinson was also a co-founder of Ethereum. But Cardano has never lived up to its initial promise and now appears to be at risk of being eclipsed by new blockchain rivals like solarium.
Add in the fact that the SEC appears to be undecided as to whether Cardano is a security or not, and you can understand why Cardano's price seems permanently frozen below the $1 level. There's not much to get excited about these days, although Cardano has had some success with a recent foray into decentralized finance (DeFi). Cardano is currently trading for just $0.42 and is down 86% from its all-time high.
Beware the Crypto Deals Basement Bin
There is a lesson to be learned here. Looking for high-quality cryptocurrencies to trade for under $1 is similar in many ways to looking for a good deal in the "clearance" section of your favorite store. Chances are you won't find what you're looking for in the right size or color. And if you find something you like, it probably has some hidden flaw that you don't discover until you get it home.
So beware of the basement bin of crypto deals. Just because a cryptocurrency is trading for less than $1 doesn't make it a "bargain."
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Dominic Basulto has positions in Cardano, Ethereum and Solana. The Motley Fool has positions and recommends Cardano, Ethereum, Solana and XRP. The Motley Fool has a disclosure policy.
Should I buy any of these cryptocurrencies while they cost less than $1? was originally published by The Motley Fool
