Altcoin prices would cost thousands without unit bias

Bitcoin (CRYPTO:BTC) advocate Samson Mow has highlighted how unit bias is misleading new crypto investors about altcoin valuations.

Unit bias refers to the tendency of investors to prefer owning whole units of an asset regardless of its price or size, a behavioral economic concept.

Mow explained on April 19 that many retail investors assume cheaper altcoins like XRP (CRYPTO:XRP), Solana (CRYPTO:SOL), and Ether (CRYPTO:ETH) offer better value simply because their prices per coin are lower than Bitcoin’s.

He illustrated this by comparing the price of one whole Bitcoin, which represents one twenty-one millionth of Bitcoin’s total supply, currently around $85,000.

Mow recalculated altcoin prices on an equal footing by adjusting for total supply, showing that Ether would be priced at approximately $9,200, XRP at $5,800, and Solana at $3,400.

These hypothetical prices represent increases of about 278,746% for Ether, 470% for XRP, and 2,328% for Solana compared to their current market prices.

“No way these alts are worth that much,” Mow stated, questioning the true valuation of these altcoins once unit bias is removed.

He also pointed out that many altcoins exploit unit bias by having very high total supplies, which obscures the actual value investors are purchasing.

Bitcoin dominance, which measures Bitcoin’s share of the total crypto market capitalisation, has been rising and currently stands at 63.69%, according to TradingView data.

This increase contradicts some analysts’ expectations that Bitcoin dominance would peak around 60% by late 2024 before an altcoin season begins.

Mow predicts Bitcoin dominance will continue to rise significantly, suggesting that altcoins may face downward pressure as investors reassess their value.

Sunny Po, an anonymous Bitcoin supporter, echoed Mow’s view by calling unit bias a “core foundational framework of the normie mind,” where cheaper prices are mistakenly equated with better value.

Historically, declines in Bitcoin dominance have signaled capital flowing into altcoins, but the current trends indicate a different market dynamic.

Mow’s analysis encourages investors to look beyond nominal prices and consider supply-adjusted valuations when evaluating cryptocurrencies.