A Danger To New Investors
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Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure 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. Most alts take advantage of unit bias by utilizing a very high supply, so people can’t figure out what they’re buying. “XRP is *only* $2 but Bitcoin is too expensive at $85,000!” Unit bias is absolutely destroying the uninitiated.#Bitcoin only. — Samson Mow (@Excellion) April 19, 2025 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…
