Entrepreneur and JAN3 CEO Samson Mow has presented an analysis asserting that cryptocurrencies such as Ethereum, XRP, and Solana are overvalued when compared to Bitcoin’s fixed supply model. His argument revolves around addressing what he refers to as “unit bias” and reframing the way altcoin values are perceived relative to Bitcoin.

Understanding Bitcoin’s Fixed Supply Model

Bitcoin’s supply is permanently capped at 21 million coins, which is a fundamental characteristic that differentiates it from most altcoins. Mow emphasizes that this scarcity is a critical factor in Bitcoin’s valuation. To illustrate, he calculated that acquiring one twenty-one-millionth of Bitcoin’s total supply would cost approximately $85,000.

“You can buy one twenty-one millionth of the BTC supply for ~$85,000,” Mow stated, highlighting Bitcoin’s intrinsic value tied to its limited supply.

Unit Bias and Altcoin Valuations

Mow argues that many altcoins exploit “unit bias” by maintaining significantly larger token supplies. This strategy makes their per-unit prices appear cheaper, misleading inexperienced investors into thinking they are getting a better deal. He used XRP as an example, stating:

“XRP is *only* $2, but Bitcoin is too expensive at $85,000! Unit bias is absolutely destroying the uninitiated.”

To provide a comparative framework, Mow calculated equivalent values for major altcoins by dividing their market capitalizations by 21 million, matching Bitcoin’s supply cap. According to his analysis:

  • Ethereum (ETH): $9,200
  • XRP: $5,800
  • Solana (SOL): $3,400

Mow concluded that these figures suggest many altcoins are overvalued when measured against Bitcoin’s scarcity-driven model.

Bitcoin Dominance and Future Predictions

Mow predicts an increase in Bitcoin dominance as the market corrects what he perceives as mispricing of altcoins. “No way these alts are worth that much,” he stated, adding that “Bitcoin dominance is going so much higher.”

Currently, Bitcoin dominance—the measure of Bitcoin’s share of the overall cryptocurrency market capitalization—stands at approximately 63.71%. Over the past year, Bitcoin’s dominance has risen substantially, increasing by:

  • 14.48% over the last year
  • 9.15% over the last six months
  • 9.71% year-to-date
  • 3.76% in the last month

How Altcoins Differ from Bitcoin

Unlike Bitcoin, which has a fixed supply and decreasing issuance through halvings, other cryptocurrencies employ different supply mechanisms:

  • Ethereum (ETH): Ethereum transitioned to a deflationary model after the implementation of EIP-1559, which burns a portion of transaction fees.
  • XRP: XRP has a pre-mined supply of 100 billion tokens, with approximately half currently in circulation.
  • Solana (SOL): Solana follows an inflationary model, though its inflation rate decreases over time.

These differences in supply dynamics further highlight Bitcoin’s unique position in the cryptocurrency market.

Final Thoughts

Mow’s analysis sheds light on the importance of understanding cryptocurrency valuation models, particularly for new investors. By addressing unit bias and comparing altcoins to Bitcoin’s fixed supply, he aims to provide a clearer perspective on market pricing and dominance trends. As Bitcoin continues to solidify its position as the leading cryptocurrency, its scarcity-driven value proposition remains a key factor for investors to consider.

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