We’re entering a bull market led by Bitcoin’s slow but steady growth, and a lot of new investors are confused. One crypto analyst claims that there’s a misleading bias that investors tend to value altcoins with. This news arrives as Ethereum, Ripple and Solana all experience different levels of price volatility.

Ethereum price today – ETH price – $1,620 (-1.5% last 48 hours). Ripple (XRP) is currently priced at $2.09, down 1.63% in the past 24 hours. Solana (SOL) is in the red, down 0.5% to $140. BTC is the only one seeing an impressive performance compared to ETH, as it trades at $88,530 with a 1.3% increase in the past 24 hours.

Unit Bias and Altcoin Valuation

Samson Mow, a Bitcoin maximalist and CEO of JAN3, recently addressed the issue of unit bias in altcoin valuation on the X platform. Unit bias is another factor to consider where investors mistakenly perceive coins with a lower unit price as being more affordable. People think these coins are going to grow more, even when their market cap or max supply implies they shouldn’t. Mow argues that this bias undermines all markets’ perception of true value, and this is especially true within the cryptocurrency space.

Mow made the point that measuring an altcoin’s price against Bitcoin can be misleading. Bitcoin, for example, has a hard cap of 21 million coins. Out of a total possible 21 million units, 19.85 million units are already in circulation. This capped supply plays a huge factor into Bitcoin’s value and scarcity.

Potential Altcoin Values Using Bitcoin's Supply Model

Calculating what some of the most popular cryptocurrencies would be worth if they followed Bitcoin’s supply model produces some fascinating, if hypothetical, results. If Ethereum were to embrace Bitcoin’s supply schedule and scarcity mindset it would be worth much more. It could even climb up to $9,200! Likewise, Ripple (XRP) would be valued at about $5,800 and Solana (SOL) at $3,400 if the same model were to be used.

These numbers are hypothetical and just meant to illustrate the point on how unit bias can skew investor perception. The intrinsic value of any cryptocurrency is derived from a complicated interplay of many factors. This is market pull, tech push, market adoption, and regulatory push.

Market Dynamics and Investor Awareness

The recent turmoil in the cryptocurrency market highlights the radical consequences of failing to take these dynamics into account. Bitcoin keeps showing its resilience and growth, Ethereum, Ripple, and Solana have shown highs and lows. When combined with the relative novelty of the crypto space, this underscores the extreme volatility and risk of investing in digital assets.

To avoid these pitfalls, investors must be mindful of cognitive biases such as unit bias, and do their own homework before investing. Knowing the technology behind the currency, where the supply of the currency lies, and what the market capitalization means will allow you to make better informed decisions.