Cryptocurrencies with a low market capitalization can often have higher upside potential than large market cap projects if investors are willing to take a punt on them. These are numerous examples of low cap cryptos that have demonstrated explosive returns – especially in recent months where several meme coins have made astonishing gains.
Bitcoin has shown substantial appreciation over its life cycle and a $100 investment in October 2010 would have yielded 1,000 BTC – currently worth about $30,000,000.
But once a crypto demonstrates this kind of price appreciation, it is unlikely to do so again. This is mostly down to simple economics where a large cap coin needs huge amounts of capital to make significant gains.
Small market cap coins, on the other hand, can make large gains as they do not need a lot of volume to move up and down in price.
With this in mind, we’ve researched and ranked the best low-cap crypto to invest in for 2023 to narrow down the search. Not only will we look at a diverse range of listed low-cap cryptos, but we’ll also help you explain how to find low-cap gems and explain the risks.
Analyzing the Top Low Market Cap Crypto Gems
Investors searching for the best low market cap cryptocurrency to add to their portfolio will find a comprehensive analysis of the top projects next. Notably, some haven’t been listed yet so investors who like the sound of them can lock in a discounted price now and claim the tokens later.
1. Wall Street Memes – Low-cap Meme Token With a Stong Community Backing
Navigating the world of low-cap crypto coins can be risky, yet it holds the potential for high returns. One of the most recent entrants in this sphere is Wall Street Memes with its native $WSM token.
Powered by a resilient community of over a million strong across various social media channels, the $WSM token is an emerging low-cap crypto and has already raised over $25 million in its presale in just over 3 months.
Wall Street Memes is no stranger to successful blockchain projects. It gained notoriety for its Ethereum-based NFT collection, the Wall Street Bulls, limited to an exclusive 10,000 pieces. This has led to unique benefits for its dedicated investor community, such as exclusive NFT collections and access to an Options Market.
This venture’s success is evident in the quick sale of its first NFT collection, which sold out within a mere 32 minutes. This feat builds confidence in the potential of the $WSM token, capitalizing on its reputation and actively keeping up with the latest trends, including minting Bitcoin Ordinal NFTs.
At press time, $WSM tokens are available at $0.0337 in its final presale stage. While presales inherently have a risk factor, the robust Wall Street Memes community serves as a backbone that could foster the longevity of this project.
WSM’s influence isn’t just confined to their community. It has attracted attention from high-profile individuals, including Elon Musk, amplifying its prospects of being listed on top-tier exchanges post-presale. Additionally, the $WSM presale kickoff was coupled with an announcement of an airdrop celebration, providing an easy participation process.
With a total capped supply of 2 billion tokens, the $WSM token keeps its community as the central focus. The distribution has been planned with 50% for the presale, 20% towards liquidity, and 30% for community rewards.
Consider joining the Wall Street Memes Telegram channel to stay up-to-date with recent news. Since low-cap meme coins have recently outperformed more established assets like Bitcoin and Ethereum, there’s potential for significant ROI for early $WSM investors.
Tokens available in presale
USDT, ETH, BNB, Bank Card
2. Meme Kombat – Low Cap Crypto Allows for AI-Enhanced Meme Combat With Betting and 112% APY
Meme Kombat ($MK) is a newly launched cryptocurrency with a total supply of 12 million $MK tokens. Of this overall supply, 50% (6 million $MK) is available in the presale at a price of just $1.667, for a total presale target hard cap of $10 million.
Of the remainder, 30% goes to staking, 10% to DEX liquidity, and 10% to player rewards. This is a Proof-of-Stake coin that allows for an immediate 112% APY, which can be generated during the presale.
The concept behind this presale is ingenious. It combines the world’s most loved memes – Doge, Floki, Baby Doge, Milady, Kishu, Mong, Pepe, Pepe 2, Shiba, Sponge, Wojack – into one ecosystem. These memes fight each other into combat, with outcomes facilitated on-chain for transparency and speed. Regards are also automatically distributed.
Spectators can bet on the outcome of the fight with three primary betting options, to enhance the gameplay. The meme illustrations are created with cutting-edge AI to make them as vivid as possible, while sticking to the original characteristics of the world famous meme characters.
In other words, this is a campaign that combines, betting, memes, and staking rewards – all of which have proven to be highly popular among presale investors and the public at large.
Moreover, the founder of this project has been publicly doxxed, meaning he is accessible online. This is uncommon with presales, which often have a series of unnamed founders.
The project has further undergone a third party smart contract audit with no severe issues located, another plus in terms of integrity and transparency.
This is an inventive presale that will likely incorporate new memes and gameplay styles in the future, after Season One finishes up. More information can be found within the Telegram and Twitter accounts.
To take part in the presale, users will need to have ETH, USDT, or BNB, as well as a compatible Web3 wallet.
Tokens available in presale
USDT, ETH, BNB
3. Launchpad XYZ – Web3 Ecosystem offering Access to Multiple Services
Launchpad XYZ is a new platform dedicated to connecting users to the Web3 sector. The aim for Launchpad XYZ is to create an all-in-one hub through which multiple Web3 ecosystems can be accessed.
All this is made possible with the platform’s native cryptocurrency, $LPX. This token can be used to earn discounts on trading fees on Launchpad XYZ’s decentralized exchange (DEX). The DEX will offer hundreds of crypto trading pairs and allow users to enter into perpetual contracts.
Through Launchpad XYZ, one can create their own Web3 crypto wallet. All users need to do is enter their email address or phone number to create the wallet. The Web3 wallet will let you connect with different DApps (decentralized applications), access self custody of assets, and interact with various Web3 services.
The $LPX token can be used to purchase fractionalized assets as well. These represent assets offering historical value, such as real estate and art. Users that stake a monthly average of 10,000 $LPX can get guaranteed access to presale listings.
The platform regularly hosts new Web3 listings, and users can receive the tokens for the new listings on their cryptocurrency wallets.
$LPX is available to buy through the ongoing presale. 250 million of a total supply of 1 billion $LPX tokens have been allocated for this phase. Currently, the price of $LPX is $0.0445.
By the final round, the price will jump to $0.07 – since the presale started, Launchpad XYZ has raised over $1.5 million.
Tokens available in presale
USDT, ETH, BNB, Card
4. yPredict – Crypto Analytics Platform Offering Multiple Use Cases
yPredict is a crypto analytics and research platform that utilizes AI-driven predictive models to give users an outlook on how certain digital assets may perform in the future. At the center of the ecosystem is $YPRED, the native token.
With $YPRED, users can purchase subscriptions to monthly predictive models. The models are created by AI developers and financial experts.
The yPredict DAO (Decentralized Autonomous Organization) makes them available to the public after verifying them. The platform uses advanced tools like sentiment analysis and chart recognition algorithms to determine the direction of coins in the market.
For instance, yPredict leverages its own patent pending chart recognition algorithm to determine whether an asset is bullish or bearish. The platform also offers AI trading signals and technical indicators.
The $YPRED token can be used to enter a play-to-earn competition. On this ecosystem, users are required to generate directional bets to determine the future of certain assets. The top performers are rewarded with $YPRED tokens.
While this token is still new, it also allows users to learn and increase their knowledge in the crypto space. Through a Learn2Earn environment, one can take quizzes and tests on crypto-related topics. By passing these tests, you are rewarded with $YPRED tokens.
The $YPRED token is available for purchase through the presale. $YPRED holders can earn a high APY by staking the token. Passive income is generated every time a new subscription is generated, as 10% of the revenue is sent toward a staking pool. Furthermore, 15% of all swapping fees on the platform are sent towards the staking pool.
Currently, this low cap cryptocurrency has raised more than $3.7 million through the ongoing presale. The $YPRED token is priced at $0.1 and will jump to $0.12 by the final presale round. Read the yPredict whitepaper and join the Telegram channel to learn more about this cryptocurrency.
MATIC, ETH, BNB, USDT, Card
5. Chimpzee – Cryptocurrency Donating to Animal Charities and Offering Multiple Earning Opportunities
$CHMPZ is the native token of Chimpzee, a new project that allows investors to earn profit while helping the environment. The Chimpzee platform consists of three main ecosystems which leverages the native token.
The first is the shop-to-earn Chimpzee store, from where users can purchase merchandise and in-game gear. For every transaction you make on the store, you earn free $CHMPZ tokens. A part of the profits generated on the store will be sent to charities that Chimpzee will partner with.
Another ecosystem is the play-to-earn game. Known as the zero-tolerance game, Chimpzee lets members enter a virtual world with their NFT passports. These NFTs can be staked on the ecosystem to earn a yearly passive income of up to 20%.
In the P2E game, players will battle against forest poachers to preserve wildlife. They will be rewarded with $CHMPZ tokens and get access to premium prizes.
Chimpzee also has a trade-to-earn NFT marketplace, where traders can get a portion of the trading fees. Those holding the NFTs will be offered a higher portion of the trading fees.
Currently on presale, Chimpzee has raised more than $1.3 million. The $CHMPZ token is priced at $0.001 and will be listed on exchanges at a price of $0.00185 per token.
|Total supply||200 Billion|
|Presale supply||40 Billion|
|Purchase methods||ETH, USDT, Credit Card|
6. Scorp Token (SCORP) – Earn Passive Income and Play Over 300 Casino Games with this Presale Token
The next cryptocurrency on our list is $SCORP, the native token of the Scorpion Casino. The cryptocurrency is used to settle payments on this crypto and sports betting platform, generate passive income for investors, and access multiple bonuses.
Firstly, investors can get their hands on $SCORP by participating in the ongoing presale. With a hard cap target of $1 million, Scorp Token has already managed to raise more than $980K. Investors now have a final chance to buy $SCORP for $0.017 before the price rises by more than 230% to $0.05 upon the exchange listing.
The presale has allocated 400 million tokens, with a further 80 million being offered as presale bonuses. This represents nearly 50% of the overall token supply. Once the listing occurs, the platform will have a total market cap of under $1 million. This leaves much room for growth due to the use cases the token offers.
One can use $SCORP and take part in over 210 casino games and 160 live games. The platform also offers a sports betting option, with 35+ betting options available. Token holders get up to 40% betting credits on casino games and can earn weekly bonuses and free game entries.
A safe platform to use, the Scorpion Casino is licensed by the Curacao government. The project has been audited by SolidProof and is 100% safe to use. Furthermore, it has been KYC verified by Assure DeFi.
200 million tokens will also be distributed as staking rewards, which can be generated by staking $SCORP. The rewards are offered on a daily basis and are paid out of a staking pool. For more information, read the Scorpion Casino whitepaper and join the Telegram channel.
|Presale supply||200,000,000 SCORP|
|Payment methods||ETH, USDT, BNB|
7. eTukTuk (TUK) – Earn Staking Rewards from this Sustainable Cryptocurrency
The next low-cap cryptocurrency on our list is eTukTuk (TUK), which is a new eco-friendly crypto that is incentivizing and rewarding TukTuk drivers from the developing world to switch to Electric Vehicles (EVs).
Currently, one can apply for the token whitelist, which gives guaranteed access to the upcoming presale.
Once the presale starts, interested investors will be able to purchase $TUK for the lowest price possible. Following the presale, the token will be listed on crypto exchanges. Therefore, this low cap token can offer long-term returns.
eTukTuk’s main goal is to empower TukTuk drivers to start using more sustainable forms of vehicles. Currently, there are 270 million vehicles running on Internal Combustion Engines (ICEs) in developing nations and these produce more carbon dioxide than cars.
eTukTuk wants TukTuk drivers to start using zero-emission vehicles (ZEVs) and the platform will start setting up Electric Vehicle Supply Equipment (EVSE) and charging stations in urban and suburban regions of developing economies.
The platform will also set up a driver app, through which TukTuk drivers can make purchases on EV charging stations via $TUK. The EVSE locations and charging stations will be set up via territory partners, which will reduce manufacturing costs.
Furthermore, since eTukTuk uses the energy-efficient Binance Smart Chain, TukTuk drivers will save 400% in revenue. $TUK holders will also be able to stake the token and earn a high APY (Annual Percentage Yield).
As the number of transactions increase on the charging stations, staked token holders will be able to earn higher passive income. eTukTuk will also offer inflationary rewards, which will be distributed through a staking pool.
8. BTC20 – Up-and-Coming Bitcoin-Inspired Low-Cap Crypto to Buy, Presale Complete
Besides our two top-ranked projects, BTC20 is one of the latest low-cap cryptos to generate buzz in the industry. It launched in mid-July 2023, seeking to be Bitcoin 2.0. While this concept stands out in the sea of new releases because it’s not a meme coin, it has other advantages. This network earned over $6 million in presale funding thanks to its promising roadmap, robust functionality, and eco-friendliness.
BTC20 uses Bitcoin’s 2011 tokenomics model as inspiration. It set its presale hard cap to $6.5 million, with a single-tiered presale price of $1 for the duration of this stage. It also allocates 100% of its coins to the community, granting more users a chance to profit from the project.
The modifications to the described system mainly concern the consensus mechanism, as the whitepaper states. The new crypto relies on PoS, a simpler, more efficient, and more functional option than Bitcoin’s PoW. The protocol doesn’t involve mathematical equations or complex problem-solving. It lets users validate transactions and add blocks to the network simply by staking their coin reserves.
Neither of these processes involves mining, a resource-intensive practice that has caused much controversy for Bitcoin. BTC20’s staking consumes less energy, making it more environmentally friendly and aligned with modern investors’ green objectives.
You can take advantage of all these benefits and earn a passive outcome in the BTC20 ecosystem if you invest in its coins. They’re available for sale today on its official website. The project’s Telegram and other socials will keep you in the loop on their release and other relevant news.
9. Pikamoon (PIKA) – Exciting Play-to-Earn Metaverse Game That Rewards Players With PIKA Tokens
Pikamoon is an upcoming metaverse game and cryptocurrency based on the Ethereum chain. The game is an homage to Pokemon, the famous anime and video game series. It’s a play-to-earn project, meaning that actions in the game can yield rewards in the form of $PIKA tokens, the platform’s native crypto.
As you can see from the project’s whitepaper, the action takes place in Dreva, a magical realm inhabited by unique monsters you can capture and use in various adventures. You can explore the four regions of Dreva, complete quests, and even battle other players’ Pikamoons. You earn $PIKA tokens in return and can use them to upgrade your monsters or purchase items.
You can use $PIKA tokens on the in-game marketplace filled with various items like treats and boosts. The interesting part is that 5% of the tokens spent on it will be burned forever in the hopes of increasing the value of $PIKA.
The project is now in its final presale stage, so the market cap is minuscule, as the $PIKA tokens will be issued to investors once the presale ends.
At the time of writing, the presale has already raised more than $3.5 million, follow the official Telegram channel for more information.
USDT and ETH
10. Bitget (BGB) – CEX Utility Token With Interesting Price Pattern And Staking Rewards
Bitget (BGB) is ranked #212 by total market capitalization with a total of $608 million. It currently trades at $0.43 at the time of this writing. BGB is an exchange token and its long-term price chart is very interesting in comparison to other tokens. The token offers staking rewards as well as a 20% discount on spot market fees.
Most tokens have a flat curve, before exploding in 2021 and undergoing a sharp decline thereafter. But with BGB, it’s a steady increase with a jump in early 2022 due to adding lots of products and improvements, without any significant price retracement thereafter. It seems to trade on fundamentals and utility, which is rarer than most think in the cryptocurrency markets.
This low-cap token is tied to a strong exchange and could be an excellent investment decision moving forward. It’s up over 440% since its inception at the time of this writing. It could experience price appreciation similar to the much larger Binance exchange, and utility tokens offer more safety and security in comparison to other limited functionality tokens.
Binance’s regulatory difficulties could also leave a gap in the market, and Bitget could take some of this market share, making this low-cap token a good option for 2023, 2024, and beyond.
11. ImmutableX (IMX) – NFT Scaling Solution Platform and Staking Token
ImmutableX is another one of the top low cap cryptocurrencies on this list that may appeal to gamers. The project’s team wants to introduce asset ownership to the digital world by using the power of Immutable NFTs.
The cryptocurrency used by Immutable X is called IMX. In addition to being staked, these tokens may be used to cover transaction costs on the platform. Those who hold ImmutableX tokens can also vote on the protocol’s roadmap.
Additionally, the project will debut its own ‘Immutable Passport’ in mid-2023. The goal is to offer a unified method for game developers to enroll players into Web3. This is comparable to an Xbox Gamertag, or an Apple ID. It will essentially function as a gamer profile, authentication, and non-custodial wallet all rolled into one. The market capitalization as of writing is around $616 million while the price is $0.54.
Cryptoassets are a highly volatile unregulated investment product.
12. Itheum (ITHEUM) – Cross-Chain Broker Site to Trade Personal Data
Itheum (ITHEUM) is a crypto with low market cap that also claims to be the first decentralized, cross-chain data brokerage platform in the world. With the help of Itheum’s suite of blockchain-powered technologies, customers are able to connect high-value data to web3.
The platform also uses cutting-edge peer to peer technology, to allow users to claim ownership of their own data and also exchange it if they wish. Members of the community can stake their ITHEUM tokens in exchange for more.
This is achievable by offering liquidity and farming services on the platform. It helps to maintain the stability of the project’s global MultiversX web3 ecosystem. As a result, the Itheum protocol team hopes it will be more widely adopted within in the community. This new low cap crypto carries a market capitalization of $19.8 million as of writing.
13. Fetch.ai (FET) – Project Combining the Best of Blockchain and AI Technology
Fetch.ai is a cutting-edge open-access blockchain platform that combines machine learning, AI, and DLT to disrupt various markets and sectors. Users of the platform can engage and communicate with objects, entities, services, and other users in the decentralized Fetch.ai marketplace.
The goal of this initiative is to create a new, intelligent digital economy by fusing blockchain and AI technologies together. The token that powers the platform is FET, one of the best low cap cryptos to watch. Many different types of enterprises can use Fetch.ai’s technology.
According to the platform, this includes transportation and mobility, the decentralized banking sector, EV infrastructure, supply chain, railway systems, and other many industries. Additionally, in the future, autonomous AI travel agencies might cut out the need for centralized aggregators. This is possibly the best low cap crypto to invest in for those interested in AI technology.
As of writing, Fetch.ai has a market cap of just over $217 million.
Cryptoassets are a highly volatile unregulated investment product.
What is Low Cap Cryptocurrency?
Low cap cryptocurrencies are digital assets with a modest market capitalization, typically below $1 billion, while large market cap coins are those above that threshold.
The market capitalization refers to the overall value of an asset and is very important in determining whether an asset is a buy or a sell. As a general rule of thumb, the larger the market capitalization, the more stable the asset. A share or token with a large market cap is more resilient to large orders placed by whales.
Bitcoin is the original cryptocurrency and has grown to have the largest market capitalization in the whole space – which is worth roughly 50% of the entire market. All other coins apart from Bitcoin, no matter how large or small, are commonly referred to as altcoins.
Market capitalization is calculated by multiplying the total number of shares or tokens by the value per share/token. If there are 21,000 BTC in circulation and each BTC is worth $100,000, then the overall market capitalization would be $2,100,000,000.
Note that these definitions are not the same as in traditional finance – a micro cap company might be less than $250 million in traditional investment markets.
This is because the definitions often depend on the overall size of the market, and legacy financial markets are orders of magnitude larger, especially when derivatives are taken into account.
The general consensus is that the market capitalization of these small cap cryptocurrencies is under $1 billion. For context, in the past year, the total market capitalization of crypto has gone from $500 billion to in excess of $1 trillion, with the two largest cryptos by market cap – Bitcoin and Ethereum – accounting for almost 70% of the overall market.
Major events like regulatory crackdowns or macroeconomic factors can have a large impact on price and market capitalization and also affects where the trading volume moves to.
Investors may find small-cap cryptocurrencies appealing due to a variety of characteristics or use cases, not to mention growth potential. But it should be borne in mind that investing in small-cap cryptocurrencies might be riskier than doing so with bigger ones. This is because they may be subject to more price volatility and have lower liquidity.
How to Find Cryptos With Low Market Cap
The market is flooded with low cap cryptocurrencies as well as some of the cheapest cryptos to invest in. To cut down on the search, below is a simple guide to finding the top projects to invest in today.
Look for High-Quality Presales
Crypto presales are renowned for giving early bird investors a huge discount for their support of a new project. With this in mind, it makes sense that many investors searching for the best low cap crypto can start their search here.
Some of the top crypto presales are outlined below, and they offer a large discount to early investors to help build hype and momentum in the project and raise capital for development. This often means that the difference between the initial price and the listing price is substantial, offerings a means for immediate profit potential.
Getting involved in a high-quality presale is probably the best way to find low market cap cryptos with impressive upside potential.
However, investors do need to conduct research, read the whitepaper and roadmap for all available information and also see what the crypto media outlets are saying about a project before they jump in.
Focus on Crypto-Centric Price Tracking Sites
There are only around 40 cryptos that currently have a market cap in excess of $1 billion and with more than 20,000 available there is a vast array of options for investors.
Cryptocurrencies can be grouped into a broad variety of sectors and categories – from decentralized finance, to metaverse projects, crypto games and memes coins. One way in which investors can quickly find low market cap crypto is by using one of the several price tracking websites.
Data aggregation sites such as CoinMarketCap or CoinGecko are excellent examples and allow users to filter and sort low market cap cryptocurrencies by their valuation or sector, and also build a customized watchlist of interesting projects. Simply select a filter and view all of the low caps on offer – though additional research is required to find out which ones are worth investing in.
Investigate Emerging Blockchain Markets
Looking ahead into the future, blockchain will open new opportunities to cater to market demand. There are certain areas that hold additional appeal for investors looking for low market cap crypto – we found that the sectors gaining the most momentum include meme coins, artificial intelligence, crypto gaming, Non-Fungible Tokens (NFTs), and metaverse projects.
Additionally, crypto with low market caps that focus on tokenized carbon credits is also increasing in popularity, with environmental concerns a huge motivating force for investment. Ethereum reduced its carbon footprint by 99.9% following its upgrade to proof of stake from proof of work while Bitcoin has been heavily criticized for its carbon footprint.
Gaming has the potential to be lucrative simply because of the time gamers spend on a given ecosystem. One of the first widescale play-to-earn (P2E) ecosystems, Axie Infinity, allowed residents of the Philippines to earn a real income during Covid-19 lockdowns and became a roaring success during the 2021 bull run.
Although the project has since struggled – largely due to a $600 million hack – other crypto games will eventually offer similar room for growth as they provide people with the ability to enjoy themselves and earn rewards.
Another option is to browse social media platforms and become part of communities that are dedicated to finding the best low cap crypto gems.
For instance, Reddit has groups like r/smallcapcoins and r/CryptoMoonShots, with both subreddits aiming to offer insights on the best low cap crypto to buy. There are also subreddits that offer insights into the best cryptos on Reddit based on consumer hype and investor sentiment.
There are numerous accounts on Twitter and Instagram that highlight new crypto projects and micro caps, although investors must be careful to watch out for shillers – those who advertise a project simply to pump their own bags or as part of paid marketing schemes.
Jacob Crypto Bury also offers an excellent video resource for people looking for low cap crypto. He breaks down the benefits of many of the top crypto presales and also explains some of the fundamentals of DeFi investment – this kind of information is essential when navigating your way through the crypto landscape. The Jacob Crypto Bury Discord group also contains additional tips and techniques relating to low cap cryptocurrency.
Get Directly Involved
Most of the best information comes from those directly involved in the business. By pursuing one of the many roles related to Web3 – network engineering, software development, writing, marketing, advertising, HR, SEO, etc – you could work for or contract with a new Web3 company that has a bright future.
This will also help you with learning the ins and outs of crypto investment so you can identify the best low cap crypto to invest in, as well as network with experienced investors who may have knowledge and experience on what might take off next.
Similar to how new staff can be offered stock options in a traditional company, a lot of Web3 startups offer to pay a percentage of employee salary in the form of tokens or give them access to early-stage investment alongside the initial investors and development team.
Whether you are directly involved or not, it’s necessary to understand how the ecosystem works so that you only choose the best investments.
How Does Market Cap Affect a Crypto Token?
A market capitalization indicator is a tool for monitoring and measuring a cryptocurrency’s market worth. That is to say, a cryptocurrency is seen as more dominant in the space if its market cap is bigger.
Typically, investing in cryptocurrencies with a larger market cap – Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Polkadot (DOT) – is a wise course of action for newbies. These coins are usually less volatile than other cryptocurrencies, albeit far more volatile than conventional assets like stocks and equities.
As per Statista, BTC, the largest crypto by market cap, has the least volatility – meaning it diverges least in price, resulting in lower gains but also less risk of losing money. In 2021, BTC had an annualized volatility rate of 81%, ETH 107%, and Solana 162%.
That said, investors may not necessarily see a huge amount of growth with large cap currencies. Compared to cryptocurrencies with larger market caps, small-cap coins have considerably more upside potential for investors – volatility can also be a sign of profitability, providing you enter and exit at the right time.
How Does Low Cap Crypto Behave Differently From Regular Crypto?
There are some clear differences between low cap crypto and medium or large cap crypto. One difference would be availability. A high cap crypto is likely to be traded on major exchanges such as Binance and Coinbase and the top cryptos are also likely to be found on major regulated trading brokers like eToro.
Low cap crypto might not be available on major exchanges and will likely be available to purchase via a presale or on a decentralized exchange like Joe or Uniswap. These can be more difficult to navigate in contrast to centralized exchanges, especially for beginners, and will have more risk attached to them (there is often no real customer support available, for example).
Low cap crypto also has much more potential to be rendered obsolete. They often have fewer servers, fewer developers, and less public awareness and can end up being dead coins – leaving them with no liquidity left in their liquidity pools and making them unsellable and, literally, worthless.
The likelihood of them going to zero is higher than a major crypto like BTC (which has 17,000 nodes and 4 million wallet addresses holding over 0.1BTC), which could be regarded as too big to completely collapse.
However, low cap cryptos also have the potential to skyrocket in value, something that major cryptocurrencies are far less likely to achieve. During 2021, Doge Coin saw a 12,000% increase within 2 months – on December 30, 2020, the DOGE market cap was only $500 million but by May it was worth in excess of $70 billion.
The likelihood of a large cap crypto such as Ethereum or Ripple seeing a 12,000% increase is small in comparison to a low cap crypto, purely due to the huge amounts of capital needed and the selling pressure it would face if such a significant move was made. Put succinctly, low cap crypto has more volatility and risk, but also more upside potential.
Risks of Low Market Cap Crypto (and How To Minimize them)
The major risks associated with low market cap crypto are scams, market manipulation, volatility, liquidity and huge loss of investment. Let’s look at what these are and how they are best avoided.
Unfortunately, the crypto market is rife with scams and scammers, who can often go undetected due to the decentralized nature of the space.
Almost 80% of ICOs in 2017 were scams and due to a lack of regulation, anybody could launch an ICO, market a product, take people’s money, and leave. A primary issue was that people failed to understand how the ecosystem works, and did not complete any due diligence on the tokens they were purchasing.
This is one of many reasons why the SEC is focused on regulating the industry, the latest of which has been the collapse of crypto exchange FTX, which saw billions of dollars of investment lost.
The best way to avoid these scams is to understand the different types of scams and the psychology behind them. The two main scams are the pump and dump (PND) and the rug pull. With a pump and dump, the procedure typically goes as follows:
- Fraudsters buy a random (low volume/low market cap) crypto
- Fraudsters hype the crypto
- Investors are fooled and buy into the crypto
- The price of the crypto goes up
- The fraudsters sell all their holdings
The rug pull is similar. The fraudsters here will actually create the token and the wider ecosystem. But once investors are enticed to sell, the development team will simply abandon the project – generally, a rug pull is more suited towards early-stage investors (potentially even angel investors) while the pump and dump can catch retail investors.
Market manipulation is subtly different from scams and can be much harder to spot and/or prove. With a rug pull or pump and dump, there is a deliberate marketing ploy to entice investors into the project, before it is abandoned (developers can even code the tokens so that nobody can sell the coins except them, which is known as a honeypot).
Market manipulation is where the price for a token is arbitrarily increased or decreased by placing large positions. With a low cap crypto of less than $20 million, a $1 million price movement will have a heavy effect on the overall price.
For certain institutions and individuals, this is not a huge amount of money, but the sudden movement upwards is likely to attract smaller investors and traders to buy in – the larger investor can then sell their investment at a profit.
It’s worth noting that market manipulation is not something that pertains only to the crypto industry. In fact, it takes its cue from the traditional financial markets. In 2020, JP Morgan paid out a $900 million settlement for market manipulation when JPM traders placed orders on one side of the market which they never intended to execute. This created a false impression of buy/sell interest that would raise or depress prices – the price spoofing manipulation took place from 2009 to 2016.
Unfortunately, there is no real way to avoid market manipulation if you have already bought in. But you can mitigate the issue by using tokens that have their launch on a large centralized exchange like Coinbase, where there are rules in place to prevent market manipulation.
Volatility & Liquidity
Low cap crypto has lower volume, and it stands to reason that it would be less available (less liquid) on major exchanges. This can be a problem if you want to sell or trade your crypto. Even if you suspect foul play and want to sell, there might not be a buyer available.
And with low volume crypto, the spread (price you pay on an exchange for placing a trade) is likely to be higher, though it depends on where you are selling. If you invest in a presale, you might also be tied into a 12 to 24 months vesting period.
In terms of volatility, investors will also have to be prepared to stand firm in the face of some heavy dips. A common principle of investment is that you have to be prepared to withstand difficult times. Investors might end up selling your tokens at a low because they need to make ends meet, whereas if they had held onto them they might have appreciated in value over a longer period.
The best way to mitigate these issues is by investing as much as you can afford and refusing to take undue risks. Allocate some of your portfolio/capital towards low cap crypto, but balance it out with some high cap crypto (ETH, BTC, SOL) for balance – diversified portfolios tend to work out the best over time and should have low, medium and high risk assets. According to Warren Buffett, rule number 1 is not to lose money – time and caution can balance out volatility and liquidity concerns.
Why Invest in Low Market Cap Crypto?
Despite some pitfalls, there are solid reasons to favor low cap crypto over high cap crypto. Below is a list of the three major reasons why you might consider investing.
The early stage cryptocurrencies that now have a large market capitalization did not any rewards or incentives to investors. These include BTC, Litecoin (LTC), Monero (XMR), Ripple (XRP), etc. This can be compared to a low cap crypto that offers 5% to 10% staking rewards to investors along with other benefits.
This is like a form of APY and compounding interest is one of the most solid principles when it comes to the creation of wealth – Albert Einstein even referred to it as the eighth wonder of the world. You simply lock up your crypto and it works like a traditional savings account, but with a much more impressive APY rate. OlympusDAO even offered a 100,000% APY at one stage in its novel DeFi mechanism.
Modern tokens also reward users with airdrops, yield farming, giveaways, and incentives for gaming and participation. Each low cap crypto project will be different. Those who are looking for rewards and incentives from their crypto investments should research each one individually.
Most modern coins (which all start out low cap, more or less) will offer some kind of financial incentive to keep people engaged over the long term. This is similar to how some of the world’s best companies (Johnson & Johnson, Exxon Mobil, Coca-Cola, McDonalds) offer a long term dividend reinvestment program to shareholders.
In traditional investment, only large and established companies offer dividend reinvestment. In crypto, the trend is reversed, which is a massive advantage to new investors.
Perhaps one of the biggest benefits to low cap crypto is more upside potential. An early stage crypto might have a good chance of an explosion. For example, Shiba Inu rose by 60,000,000% in 2021. The same applies to large volume cryptos like Polygon (MATIC). From August 2020 to May 2021, it experienced a 12,000% increase ($0.20 to $2.40), but expecting such an increase to happen again is unrealistic.
But it’s highly unlikely to see this kind of price increase again, a second time. The charts the majority of established crypto exhibit one or two large price increases, before a long term stabilization.
This upside potential can also be seen in many presale tokens. During stage 1 of the Wall Street Memes presale, investors could buy tokens for $0.025 each – by the final round, the price will jump to $0.0337. In other words, those who bought in early will have secured immediate paper gains of 35%.
Less Competition from Institutions
As a general rule, the larger the market capitalization of any asset, the great the competition. In a world of high frequency trading and large whale positions, it’s possible to get caught out even when you do your research.
Large institutions don’t typically trade low volume crypto (or low volume stock, for that matter). This is because it would represent undue risk to them, due to lack of information and liquidity. They could purchase millions of dollars of an asset, but find themselves unable to offload it. And if they did, it might be at a heavy price in an Over The Counter (OTC) market.
So provided that the project is not a rug pull or pump and dump, low cap crypto can ensure that you have fewer things to worry about! You might have simply found an undervalued crypto with solid fundamentals – every investor’s dream!
This guide has revealed the best low cap crypto to invest in for 2023, in addition to a diverse range of other projects worth researching.
We found $WSM, the token that backs the Wall Street Memes platform, to be the best low-cap cryptocurrency. By harnessing the reputation of Wall St Bulls NFTs, it has created an exciting environment for investors.
Given its digital popularity, fair token distribution, and potential for high returns, $WSM stands out as a promising prospect. The presale has already raised over $25 million in only three months.
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