Crypto expert Samson Mow is warning new cryptocurrency investors about a sneaky psychological trick: unit bias. This bias makes people focus on the price of a single coin, instead of the overall value of the investment.
The Problem with Cheap Altcoins
Mow points out that many altcoins (cryptocurrencies other than Bitcoin) have a much larger supply than Bitcoin. Bitcoin is capped at 21 million coins. Many altcoins have billions. This makes them seem cheaper. Mow uses XRP as an example: “XRP is only $2, but Bitcoin is $85,000!” This is misleading.
The low price of a single altcoin makes it seem like a better deal than a fraction of a Bitcoin. This is unit bias in action. New investors are getting tricked into thinking they’re getting a bargain, when they’re not.
A Fairer Comparison: Adjusting for Supply
To illustrate the point, Mow imagined what would happen if all cryptocurrencies had the same limited supply as Bitcoin (21 million coins).
- Ethereum:
Would jump from its current price to roughly $9,200 per coin. That’s a massive increase!
- XRP: Would skyrocket to about $5,800.
- Solana: Would soar to approximately $3,400.
These numbers show that even though a single altcoin might seem cheap, its actual value, when adjusted for supply, is often much higher than it appears.
The Bottom Line: Bitcoin’s Dominance
Mow concludes that altcoins are massively overvalued when you account for unit bias. He believes Bitcoin’s dominance in the crypto market (currently around 60%) will continue to grow. This contradicts earlier predictions that money would flow away from Bitcoin in late 2024 and early 2025. He now predicts Bitcoin’s dominance will increase significantly./p>