Why do low prices always seem attractive?

Recently, while chatting with a few acquaintances, I mentioned that I was interested in cryptocurrencies, and we started discussing this topic. While talking about the coins in my portfolio, one of the acquaintances commented that one of the products I bought was "very expensive." When I asked what basis he made this comment on, I realized that it was solely based on the product's "price." After that, the question "Do low prices seem more appealing to people?" started echoing in my mind, and with a quick scan, I noticed that this could indeed be the case.

We can illustrate this topic using two different coins with similar market values. Let's say the two coins we selected are "AAVE" and "UNI". On May 27, 2025, when I wrote this article, the current price of AAVE was 280 dollars and its market value was 4.25 billion dollars, while the current price of UNI was 6.68 billion dollars and its market value was 4.2 billion dollars. With simple math, for the amount of money you can buy 1 AAVE, which is 280 dollars, you can buy 42 UNI.

Just like a child

Based on the statements of the people I spoke to and the research I conducted on the internet, I think there may be some psychological justifications underlying this situation. Firstly, we can think of these individuals, who do not improve themselves in terms of financial literacy and engage in buying and selling without even knowing what the product is, as similar to a child. Just like children who have not yet developed abstract processing skills during their childhood, we can deduce that these individuals prefer 40 pieces of 5 TL banknotes instead of a 200 TL banknote, because they have no information about the value of money and they focus solely on the concrete processing dimension of the product they have, leading them to think they have much more money.

Do many products bring significant profits?

Secondly, they think that they can earn more money because they have a lot more products in hand. In other words, they operate on the logic of "if I can make a profit of 5 dollars from 1 product, I can make a profit of 200 dollars from 40 products." At this point, the more pieces you have, the more multipliers you can have. Therefore, having a large number of products provides individuals with a feeling of "great profit potential."

The misconception that "lower-priced products rise faster"

Thirdly, low-priced products appear to be both cheaper and more accessible to individuals. The effort required to own a product worth $280 is not equivalent to that of owning a product worth $6.68 billion. Considering memecoins, individuals can own millions of X products even with very small amounts of money. At this stage, people also have a misconception that low-priced products can rise much faster and easier, as well as to a much greater extent.

Those who mint coins with a lot of zeros

Fourthly, the fact that memecoins like Shiba Inu and Dogecoin started at very low prices and provided significant profits has negatively influenced individuals' appetites and risk perceptions. For this reason, many memecoin creators are making similar promises by issuing ( coins with many zeros ) and selling the dream that people can "get rich."

Finally, high-priced products are perceived to be more volatile compared to low-priced products. For example, AAVE's current price is 280 dollars, and a 20% decrease would bring it down to 224 dollars, while a 20% increase would raise it to 336 dollars. In contrast, UNI's current price is at 6.68 dollars, and losing 20% of its value would bring it down to 5.34 dollars, while a 20% increase would raise it to 8.02 dollars. In this context, individuals may evaluate the price change in percentage terms as the same, but in terms of unit price volatility, they might consider AAVE to be 56 dollars and UNI to be 1.34 dollars, depending on their perceptions of risk and appetites.

When looking at the underlying reasons for all this story, it can be noted that individuals do not improve themselves in terms of financial literacy, their knowledge about the relationship between product price and market value is insufficient, only price-focused calculations are made, and the value proposition is pushed to the background.

Examples

Let's give a simple example to inform those reading this article: If we want both coins to double, namely AAVE and UNI, we need the total market inflow to be 4.2 billion dollars, assuming AAVE's price is 560 dollars and UNI's price is 13.36 dollars. Of course, we can say that this example can occur if we exclude other parameters such as coin inflation. To reinforce this with another example: let's assume that a 100 dollar X coin has a market value of 20 million dollars, while a 1 dollar Y coin has a market value of 1 billion dollars. For X coin to double and reach a price of 200 dollars, an inflow of 20 million dollars is sufficient, while for Y coin to double and reach a price of 2 dollars, an inflow of 1 billion dollars is required. Therefore, rather than making a price-focused calculation, making a market value-focused calculation will allow you to act more realistically.

In summary, what needs to be done is to improve your financial literacy by researching which parameters may affect the product price, rather than making a price-focused calculation, and to try to protect yourself from the psychological games played by market makers. One of the fundamental ways to protect yourself from psychological games is to recognize the problem itself and learn how to solve it. As you broaden your knowledge of the markets, I can assure you that you will begin to realize the cognitive biases you have and the psychological manipulations you have fallen into.

This article does not contain investment advice or recommendations. Every investment and trading activity carries risks, and readers should conduct their own research when making decisions.