The Bitcoin Price Equivalence Shows What "Cheap" Cryptocurrencies Are Really Worth
There's been a lot of talk lately about market capitalization and circulating supply. As sub-$1 altcoins have shot up in price, some new investors have been making noises about their anointed coin being worth more than bitcoin one day. What these new entrants fail to take into account is digital scarcity: the notion that assets which are plentiful are cheaper than those with a limited supply for good reason. Bitcoin Price Equivalence is a new website that seeks to set that right.
Cheap But at What Price?
The rise of crypto's "penny stocks" has brought with it fevered debate about how much these digital assets are worth. A widely circulated tweet last week "Removing Unit Bias," asked, "If everything had the same supply cap as Bitcoin, would you still buy it?" and displayed popular cryptocurrencies' current value if there were just 21 million of each in existence. Bitcoin columnist Eric Wall followed this up in his weekly trading feature, writing:
Of course, the unit price of a coin is a totally senseless basis for making investment choices on. Any cryptocurrency–even Bitcoin–could have been a sub-cent item, if Satoshi chose the final cap to be 21 quadrillion instead of 21 million.
To help calculate the true value of cryptocurrencies, whose circulating supply can differ wildly, a new website has been created. Bitcoin Price Equivalence "normalises price by removing unit bias, coins that look "cheap" are probably not as cheap as you think".