Disclaimer: This article is published for educational purposes only and does not constitute investment advice. Always conduct your own research before buying any assets, and never invest more than you can afford to lose. This week, everyone is buzzing about the Notcoin (NOT) listing and speculating about its price. The fascination with low-priced assets dates back to 1934, when the U.S. Securities and Exchange Commission (SEC) coined the term "penny stocks." It was the SEC’s actions that helped shape the belief in Bitcoin and set the stage for the NOT listing. Let’s take a look at penny stocks, the original low-priced assets with big potential. In this article, we’ll explore why people love buying these assets, how they make their way to the major leagues, and why memecoins and low-cap tokens play a beneficial role in the broader crypto ecosystem.

What Exactly Are Penny Stocks?

In 1934, the SEC officially introduced the term "penny stocks" to describe shares that traded for less than $5 each, or as the SEC put it, "pennies on the dollar." Over time, the definition evolved, and now the SEC refers to them as "microcap stocks," which are public companies with a market cap of less than $250 million and shares that aren’t listed on major exchanges like NYSE or NASDAQ. Penny stocks typically trade over-the-counter (OTC) or on peer-to-peer markets. They have limited liquidity and high volatility, making them attractive to investors seeking fast profits. Despite their reputation, many penny stocks have delivered significant returns. In 2023, for example, five small U.S. companies saw their shares surge by over 100%. Notably, companies like Apple, Ford, and AMD were once considered penny stocks due to their low initial prices.

Why Are Penny Stocks Popular in Investor Circles?

• Affordability: With just $1, you can own a whole share. Which sounds better: "I bought 0.3 TON" or "I bought a few thousand of this XXX token"?
• Growth Potential: It’s easier to envision a $1 million company growing to $10 million than to imagine Nvidia shares climbing from $900 to $1000.
• Promotion and Buzz: Penny stocks often have catchy names and are heavily promoted. Dedicated bulletins and newsletters tell investors how the stock could rise if the company performs well.

Why Do Penny Stocks Matter Today?

If you think penny stocks share a lot of similarities with memecoins and low-cap tokens, you’re right:

• They often trade "pennies on the dollar," with most memecoins priced under $0.01, regardless of market cap. Memecoins and low-cap tokens often aren’t listed on major exchanges, instead trading primarily on decentralized exchanges (DEXs).
• Like penny stocks, memecoins are heavily marketed through influencers, social media, and dedicated channels.
• They are highly volatile—small-cap tokens can surge 2–10x during a bull market, while Bitcoin’s growth tends to be more gradual.
• These assets are often overlooked by the masses until they get listed on a major exchange.

Understanding the parallels between penny stocks and low-cap tokens can help inform your investment decisions. Penny stocks have almost a century of trading history, and we can use that knowledge to better evaluate crypto projects. Check out our educational article on DYOR to learn how to filter and assess on-chain projects and their tokens.

Shifting Penny Stocks Trading to Memecoins and Low-Cap Projects

The primary reason people trade penny stocks and low-cap tokens is to make money faster than with traditional investments. So, how can you identify promising low-priced tokens? Growth Potential: Before investing, assess whether a token has the potential to grow 2–10x. For instance, tsTON, the token of the Tonstakers liquid staking protocol, has a steady 4% APY and doesn’t offer the same high-risk, high-reward growth as a typical penny stock or memecoin. Hype: Memecoins and small tokens are often subject to market manipulation and shilling, but investors can profit from this. A well-marketed project might rise enough to allow early investors to take profits. Major Exchange Listings: A low-cap project gains legitimacy when it gets listed on major exchanges. The listing of Notcoin (NOT) on Binance is a significant milestone, signaling the growing recognition of the token. This mirrors how Ethereum DeFi tokens surged after being listed on centralized exchanges, or how Solana's memecoins gained attention once listed on major platforms.

Conclusion

Penny stocks and emerging cryptocurrencies share many similarities, from low market caps to highly volatile prices and the potential for substantial growth. While the "penny stock" label might sound playful, it’s crucial to monitor these assets carefully. After all, many groundbreaking companies began as penny stocks, and the most influential Web3 projects often start as low-cap tokens. Follow our DYOR guide to separate the good projects from the bad. Listings are one of the most significant milestones for low-cap projects. Not only do they attract attention from retail and institutional investors, but they also shine a spotlight on the entire ecosystem. We hope that the Notcoin listing will help the TON ecosystem gain even more recognition and excitement.