Love coins under a dollar? Think again!

in bitcoin •  last year

Over these past few weeks, the market seems to love coins that are under $1. They immediately give the impression that they are affordable and has amazing potential to 10x or 100x in value. Numbers like $15,000 for a coin seem intimidating and unaffordable ... who wants to own 0.001 of a coin anyways?
This is called unit bias - we prefer specific units even though we should be looking at the total supply and market cap. The price is a result of the supply, but the supply is an arbitrary number made by the designers of the coin. It's just as easy to make a 10,000,000 supply coin as 10,000,000,000,000,000. The larger the supply, the cheaper the coin. But this doesn't have anything to do with its tech and how good a coins is.

I made this following table to show the price current coins if they had the SAME total supply as bitcoin (assuming current values, excluding potential mining) :

Now ask yourself.. would you really but that coin if it was priced like this?

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It started with IOTA, then Cardano, Ripple, Stellar Lumens, Nem, TRON etc...

Especially Tron it's ridicculous.

You are exactly right, the market cap is all wat is important to look at. Yesterday I said for the first time to my friends that I see a bubble (in altcoins, not in BTC) and this is exactly the reason. People buy without any investigation.

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yeah people just look at the price. oh shit its cheap buy it!

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I have heard this same thing goes for shares of companies. Some people think that a share is cheap because it is x,xx price instead of xx,xx or xxx,xx.

This is educational post.
It opens ones mind to understand the true value of cryptocurrency.
Keep on steemit.

Thank you for doing this. People have been buying “cheap” coins because they want a bunch of coins for when the price goes up. But the percentage growth could be just the same in a coin that costs $300 compared to $.01. Ive been watching cheap coins and i think they get pumped by investors looking for cheap coins. But a lot of them dont bring anything new to the table. Just more of the same. I hope people see this post by you and stop making these mistakes.

It’s one thing to believe in a coins tech, but its another thing to just buy a coin based only on price.

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people think the coin price means they are a penny stock. but supply matters!

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Yup. Supply can tell you if a coin is overpriced or underpriced when you also look at what the coin brings to the crypto world. Looking at one factor, especially just price is a recipe for disaster. It’s a good way to burn money.

Lol. I think getting involved in crypto could serve as an economics class for some people :)

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You make a really valid point about many low priced coins not bringing anything new to blockchain technology, the are pumped by investors who are scared of high prices for entry points or who "drink the koolaide" from celebrities & influencers. This same impact can be seen im the stock market. Stocks split for many reasons, but many times they want a lower entry point for investors. Amd stocks get hyped all the time. We'll see the same playbook with cryptos.

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Yup. I dont think the entry price is a big deal, because you should be about percentage growth. Entry should only matter if a coin is underpriced or overpriced. But price alone is not important

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True. Investor psychology is an interesting study though. Price does matter for some who haven't trained themselves to look past the baseline Unit of Measure (in this case a share of stock or a whole coin/token).

you are rite, I think its in our psychology to look on cheap rather than comparing the quality. :)

Hi Michael I've been into a coin since June last year called nlc2 the fantasy sports coin it has its own visa fiat gateway now to purchase nlc I would love you to do a review now the new ui is so smooth now this coin truly has potential 😊

In your price comparison table, shouldn't Ripple have a higher market cap than Bitcoin if the price is higher and they have the same supply? Could you explain your math or what you mean by excluding mining?

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I think he took the ratio of the supply of the coin to Bitcoin’s supply, and then multiplied that ratio by the price of the coin currently

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The proper way to do this comparison would be to divide Ripple's market cap with Bitcoin's supply. $122,412,211,193 / 16,783,037 = $7,294, not $18,953. He actually has the number right for Ethereum though.....

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Why would you divide market cap by BTC Supply? To me that doesn’t make sense. But my method gets you the same answer. Yes his ripple calculation is off

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Because you want to see how much XRP would be if it had the same number of coins as Bitcoin. Coin Price x Number of Coins = Market Cap. So Market Cap / Number of Coins = Coin Price. Your method get's the same answer but mine has one less variable, so I prefer mine.

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When you multiply a ratio by a number (XRP Price), you are only multiplying the numerator of that ratio with the number.
(XRP Supply / BTC Supply) (XRP Price) >>> Yours
= [(XRP Supply) (XRP Price)] / BTC Supply
= (XRP Market Cap) / BTC Supply >>> Mine is yours simplified

This was a really great chart that gave me a different perspective on price. Thank you!

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Yay thanks for reading!

NEO is still undervalued even on this chart.

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NEO will be one of the players that will remain after the dump of all those sit coins. We are in the time of exuberance and this will last. But when the time comes and the dust is settled only the fittest will survive!

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I agree 100%

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Love it! Gives us time to stash em and generate Gas... thanks NEO!

I absolutely agree! A lot of people nowadays only look at the price value, but not the TRUE value of the coin for quick profit. Not believing on the technology that the cryptocurrency brings. sad.

It's interesting to note that Dash is one of the only coins in this list that is represented by a significantly lower price than its current value at $1100. That seems to imply that at $1100, Dash is severely undervalued.

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Incorrect, Dash just has fewer coins than Bitcoin. The point he is trying to make is that we should be paying more attention to market cap than coin price. However, his math for Ripple is wrong.

Nice chart - this should be a permanent colum in coinmarketcap.

Thank you for the perspective. I definitely fall into this trap sometimes.

bee doing the same thing of buying cheap coins and HODL until the price is right the sell and repeat the process again.

You have been the most helpful source I have found for someone getting involved in cryptos. Thank you! Your rewards, followers, etc. are all very well deserved. Please keep it up -- I'm learning a lot!

Nice quick reference chart. I always compare market cap to price to reasonable price potential before i make a decision.

this a great chart.
many people are improved by chart
thanks for shareing

Great post for crypot newcomer. Alway good information from Boxmining, Thanks!

if I knew that RIPPLE will cost 20 thousand, I would have gotten it

"...the market seems to love coins that are under $1." Did you hit that on the head! I was ready to bite the bullet on 'RaiBlocks,' but was a little slow getting in before it took off, and did it ever take off!

Excellent post. Keep going te good work.

I've been guilty of this LOL

I just feeling the supply is the most essential when it comes to purchase of coins

Ha yeah I wrote something quite similar. I didn't know it was called unit bias though.

I save this chart is very good 😀😀

I'd rather buy when they are around one dollar or there about than wait for them to skyrocket to the amounts as charted above. Those coins dancing around $1 today can be the envy of buyers in less than a year.

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You also have a very valid point. Some of those great coins out there started around the price of one dollar (and of course with a low market cap). So if you can do your research well, why not buy around such price?

hot post of the day

Great stuff! This should be required reading for anyone entering the crypto space. Great break down of the prices on that table too, just printed it out to remind myself LOL

GREAT İDEA

Excellent update report about coin value against dollar. Please, based the report.

wow great. Thanks for that!

Like I said before, people are just buying into alt-coins at them moment hoping they will follow in Bitcoins footsteps. Imagine taking $100 and buying $10 worth of coins from each of the cheap coins, if only one of them gains like Ripple did you would make a pretty decent profit. And most of the people don't even know what most of the coins benefits are over other coins, they just buy random ones haha.... Like playing the Lottery!

Awesome chart!!!! Great job :)

People get misled by the value of "one coin". It is the MARKETCAP that can give an indication of the evaluation of a coin. The only value in a low price of one coin is if the transfer fee is say 0.0001 units of a coin. Then a lower coin price is good. But if that coin has the potential to go to 10k (based on market cap) then the %-fee needs to change or it will not be viable as a transaction means. Just look at bitcoin, how many want to do BTC transacitons with $15 fees and 24 hour transfer times?!

That's a very interesting table, thanks for sharing it. I think people are too quick to jump on a coin based on its price - it's more important to look at the value of a coin, including the strength of a company behind it!

Max supply is really important, and it's great that you're including it here. Market Cap only counts circulating supply, so it doesn't tell the whole story. I especially like the 'Y2050 Market Cap' as stated by https://onchainfx.com/ because it includes mining as well. ...too bad they only list 60 (ish) tokens, so you still need to research most alts yourself for that.

This bias is exactly what will cause the bubble to pop in my opinion! We need to educate new investors asap, otherwise this isn't gonna end well!
Great post!

I think you know @cryptovestor and thats what I replied today to his video:

"I've a huge problem with the current market situation: Coins less than one Dollar. Why? Because people buy them like crazy. Take a look at CoinMarketCap. You have anyway a tab open ;) and scroll down the list. The most gainers are all Coins which are or were a week ago <1$. Here are some examples: Ripple, Cardano, NEM, Tron, Stellar, Verge ...

Why this is a problem in my opinion? There a lot of new people in the space that don't understand that price is as unimportant as the name of a coin.

Here's an example with IOTA. The price you see on CMC is in MIOTA (Mega IOTA, which are 1.000.000 IOTA). Imagine CMC would show you the price for one KIOTA (1.000 IOTA) which would be around 0.004$ or for one GIOTA (1.000.000.000 IOTA) which would be ~4000$. That are huge price jumps but it doesn't matter! The value for IOTA itself stays the same. The only thing that matters is the market cap, which is a combination of price and supply.

The newbies wanna catch the new BTC and imagine/hope their coin can go up to the same price as BTC. I have this opinion because I read more often stuff like: "Ripple to 100$???" or "ADA to the mooooon 1000$!!!!" which makes me wanna cry. (These are just two randomly picked examples, I don't dislike these coins). That means that they would be at a many TRILLION USD market cap. Probably in ten years if everything goes perfect. But I see 95% of them crashing again as people realise they are overvalued. At least I hoped so. BUT I also didn't see XRP ever reach 1$ and here we are at nearly 4$. So I might be wrong, no one can see into the future. I just want to point out that the price is irrelevant and that it scares me so many people don't get it."

My real concerns are, that the market is like that "Hey any big influencer (John mcafee or currently it's enough if even any youtuber like you say anything about a coin) 'promotes' a coin - I'm buying in". Even if you, especially you really wants to educate us instead of promoting an coin, a bunch of people just buy in without knowing about the tech or anything else. I really don't don't want to blame you or any other person with a lot of followers. I want to blame the people which invest without any interest about the coin inself. These people only have $ in their eyes. And that are way to many. Way to many. That's why I cashed out some profit... two weeks ago everyone was like "Hey Bitcoin it's a bubble". Now where bitcoin stays about the same level nobody talks about it again... but altcoins going more crazy than btc ever did and noone complains. "When everyone is greedy..." I think everyone knows warren buffet. Just be fearful at the current market!

I purchased 37 XRP the other day solely based on the price point. This article helped me to think first and to be well-educated on a coin before investing.

a lot of times people completely ignore the total supply of coins when expecting price to go up from 1 digit rates. Your table is a a great apples-to-apples comparison and helps bring perspective .

Most people think that there will be a repeat of bitcoin with these small Altcoins. They think they will become millionaires with these coins just like the early adopters of bitcoins became.

So glad, i come across this write up, am actually a victim, steemit has indeed been teaching more lessons of recent.

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