E The New Investor’s Dilemma: Crypto Or Penny Stocks?

There are many differences between cryptocurrency and penny stocks, but it’s fair to say that each market attracts its share of first-time investors. And there is a good reason for this confluence. 

For starters, anyone can invest in cryptocurrency and penny stocks using modest initial capital. What’s more, both offer the potential for short- and long-term growth, and just as there are countless penny stocks into which you can put your savings, there are thousands of cryptocurrencies that can be purchased and traded on the markets. Other parallels between cryptocurrencies and penny stocks include the accessibility of both types of assets and bygone eras when regulation and investor protections were scarce. 

On a price-per-unit basis, the vast majority of digital assets have a value similar to that of penny stocks, which trade for $5 per share or less. These low-cap digital assets are even referred to as ‘penny cryptos.’

The question is, what’s the best option for a budding new trader – stocks or crypto? And which factors do you need to be aware of when weighing up your decision? 

Trading Penny Stocks

Examples of so-called penny stocks include FCEL, ENZC, and ALPP. The former is the stock of FuelCell Energy, Inc., (FCEL) and as its monthly chart shows, trading it can be a profitable endeavor:

FCEL 30-day performance. Source: Nasdaq.

Successfully day trading penny stocks calls for an understanding of global industries (renewables, energy, metals, supply chain, pharma etc) and of the innovations that companies operating in these domains are pushing, which will, in turn, drive their stock price.

You’ve probably heard the saying “buy the rumor, sell the news.” When you’re day trading stocks, there’s a lot of truth in this. Successful trading calls for keeping in the loop about company developments and filings, regulatory actions, and broader macro trends that can feed into the demand for particular stocks.

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Disclosure: The material appearing on this article is based on data and information from sources I believe to be accurate and reliable. However, the material is not guaranteed as to accuracy nor does ...

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