Crypto Exec Calls Out Altcoin Bias: A Danger To New Investors

Source Bitcoinist

Bitcoin analyst Samson Mow cautions that psychological biases are deceiving new cryptocurrency investors. The CEO of Jan3 recently noted that most new entrants to crypto markets are being misinformed by what economists refer to as “unit bias,” leading them to make wrong investment decisions based on the price of coins instead of real value.

Investors Misled By ‘Cheaper’ Altcoins

Inexperienced investors tend to confuse cheaper-priced altcoins as good bargains against Bitcoin, says Mow. “Most alts exploit unit bias by having a very high supply, so people can’t tell what they’re buying,” Mow tweeted on X.

He underscored this confusion with an illustration: “XRP is *only* $2 but Bitcoin is too pricey at $85,000!” This price illusion occurs because most other cryptocurrencies have such much bigger overall supplies than Bitcoin’s hard capped 21 million coins.

The psychological implication causes most fresh purchasers to wish to hold full coins of lesser cryptocurrencies rather than fractional amounts of higher-priced coins.

Unit bias, Mow asserted, is devastating the inexperienced big time, implying that ignorance is damaging newbie investors who aren’t aware of the difference in market capitalization and individual coin price.

Comparing Prices By Equal Supply Shows Different Results

Mow constructed a thought experiment to illustrate how much more extreme cryptocurrency prices would be if they all shared Bitcoin’s limited supply.

According to his estimates, if Ethereum only had 21 million coins (compared to its much greater supply), each coin would have to cost approximately $9,200 – a whopping 278,740% hike from its current price. Likewise, XRP would soar 470% to $5,800 per coin, and Solana would climb 2,325% to $3,400.

“You can purchase one 21-millionth of the supply of BTC for ~$85,000,” said Mow. “What happens if you remove unit bias from alts in order to find the equivalent of 1/21 million?” His conclusion was obvious: “There is no way that these altcoins are worth that much.”

Bitcoin Dominance Higher Than Projected

Bitcoin’s portion of the overall cryptocurrency market has defied expectations by hitting around 60%, as indicated by TradingView data. This indicator, referred to as “Bitcoin dominance,” quantifies Bitcoin’s market capitalization in relation to all other cryptocurrencies combined.

Following recent trends in the markets and his analysis of unit bias, Mow now forecasts that “Bitcoin dominance is going to go much higher” than where it is at the moment or even where the previous expectations stood.

This contrasts with previous predictions which indicated capital would move out of Bitcoin to other cryptocurrencies late in 2024 and early 2025.

Featured image from Capital.com, chart from TradingView

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Ripple (XRP) Price Sees a Surge, Solana Targets $600 in 2025 as Investors Increase Focus on New AltcoinThe cryptocurrency market is showing renewed momentum as Ripple (XRP) experiences a significant price surge, and Solana (SOL) sets its sights on a bold $600 target by 2025. Meanwhile, a rising altcoin, Lightchain AI, is capturing investor attention with its innovative ecosystem and strong presale performance, making it a compelling choice for forward-looking investors. Ripple […]
Author  Cryptopolitan
Jan 15, Wed
The cryptocurrency market is showing renewed momentum as Ripple (XRP) experiences a significant price surge, and Solana (SOL) sets its sights on a bold $600 target by 2025. Meanwhile, a rising altcoin, Lightchain AI, is capturing investor attention with its innovative ecosystem and strong presale performance, making it a compelling choice for forward-looking investors. Ripple […]
placeholder
What Crypto Whales are Buying For May 2025Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
Author  Beincrypto
Apr 21, Mon
Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
placeholder
Analysts Highlight 4 Reasons Why ETH Price Could Rebound Strongly in MayEthereum (ETH) has declined for five consecutive months. However, it enters May with rising optimism.
Author  Beincrypto
May 07, Wed
Ethereum (ETH) has declined for five consecutive months. However, it enters May with rising optimism.
placeholder
Ethereum Price Ready to Surge—$2,000 Level Could Be Within ReachEthereum price started a fresh increase above the $1,800 zone. ETH is now rising and attempting a move above the $1,850 resistance. Ethereum started a fresh recovery wave above the $1,820 resistance.
Author  NewsBTC
May 08, Thu
Ethereum price started a fresh increase above the $1,800 zone. ETH is now rising and attempting a move above the $1,850 resistance. Ethereum started a fresh recovery wave above the $1,820 resistance.
placeholder
Ethereum Price Explodes Past $2,200 with 25% Surge—Momentum Builds FastEthereum price started a fresh surge above the $2,000 zone. ETH is now up over 25% and consolidating gains near the $2,200 zone. Ethereum started a fresh surge above the $2,000 resistance.
Author  NewsBTC
May 09, Fri
Ethereum price started a fresh surge above the $2,000 zone. ETH is now up over 25% and consolidating gains near the $2,200 zone. Ethereum started a fresh surge above the $2,000 resistance.
goTop
quote