Flippening Definition, Factors, and Implications in the Cryptocurrency Market

If ETH overtakes BTC as the largest cryptocurrency, it will signal a change in investor sentiment and adoption patterns. It could also indicate a shift in the overall direction of the cryptocurrency market. For example, if there are 10 million BTC in circulation, and the price of each BTC is $10,000, the market cap of BTC would be $100 billion. The Flippening is the hypothetical moment when Ethereum’s market cap surpasses that of Bitcoin, how it could potentially happen, and why it matters. “The flippening, while it’s an interesting conversation point to me, doesn’t really matter, because I wouldn’t invest in ethereum simply because it might go up more than bitcoin in the short term,” Alfred said.

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2. While market cap is the primary metric used to determine the Flippening, it’s not the only one.
3. This indicated that while still very improbable, it was possible that Ethereum could surpass the value of Bitcoin.
4. Smart contracts are used to automate the agreement terms between the participants of the protocol thereby eliminating the need for trust, as well as intermediaries.

The protocol facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain through the use of smart contracts. Much like Bitcoin, The Ethereum blockchain is also an open-source distributed ledger for validating and recording transactions. Ethereum has its own digital currency knows as Ether or ETH that facilitates transactions on the network. Finally in 2013 we see the birth of a new coin – Ethereum (ETH) – which added smart contracts to the new blockchain technology. Several metrics measure the usefulness, value, or importance of a cryptocurrency.

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If you decide to invest at all, most investors should make crypto holdings part of a larger diversified portfolio strategy. Despite a more than six-year head start for Bitcoin, Ethereum quickly mtrading review skyrocketed into the No. 2 position in terms of largest cryptos on the market. As of mid-2022, Bitcoin (about $575 billion) was more than double the size of Ethereum (almost $220 billion).

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Until a year or two ago, such a change seemed impossible, yet the charts speak for themselves. The Flippening refers to the potential future event when another cryptocurrency, likely ether, overtakes bitcoin in market capitalization. In other words, when bitcoin and ether “flip” places as the #1 and #2 cryptocurrencies.

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Since then, even though its price per coin has risen drastically, Bitcoin’s market share has fallen compared to its share against the rest of the crypto market and now stands below 60%. At the same time, other cryptocurrencies, especially Ethereum, have rapidly gained market share. The assumption that Ethereum gives better freedom and the added benefit of being able to write smart contracts was a crucial aspect that prompted predictions that a flippening might occur. To some extent, internal flippening already happened in 2019 when the number of ERC-20 transactions surpassed the number of transactions completed using Ethereum itself.

It also briefly outperformed Bitcoin in transaction volume during the 2021 bull market. Generally, Bitcoin still dominates the market in terms of trading volume, Google search keywords, market capitalization, and active addresses. Another factor that could contribute to this phenomenon is the cryptocurrency’s utility. Ethereum is sometimes referred to as “digital oil” because it facilitates smart contracts, the creation of dApps and DAOs, and supports creators through non-fungible tokens (NFTs). The success of DeFi applications could lead to more people investing in Ethereum, thereby boosting its value.

One could argue there was an air of disdain between most pro-bitcoiners and those whose see the merit of alternative cryptocurrencies. Multiple years of friction have caused a paradigm shift in the cryptocurrency world, an effect known as the flippening. To be more specific, it is evident most altcoin traders no longer base individual coins’ value on the bitcoin price. Ethereum is largely inspired by Bitcoin, and is currently the second most valuable cryptocurrency with a market capitalization over $216B. For example, Ethereum has a much larger transaction count than Bitcoin at the time of writing (October 2022).

What is the flippening?

And this doesn’t include the market caps of the tokens of the protocols building out these applications. Some of the top dexes, lending protocols, content projects, and derivatives networks are all built on Ethereum and utilize ERC-20 tokens. Turns out, “The Merge” has been a big buy the rumor, sell the news event thus far. Of course, there is some macro to blame here as well with hotter than expected CPI prints last week.

Several dozen ICOs are offered on top of the Ethereum blockchain, rather than using Bitcoin’s technology. It is evident Bitcoin will not be suitable for every project one can think of, or at least not in its current state. The flippening indicates this shift towards a more competitive industry in which bitcoin will not necessarily be the center of focus any longer. Altcoins, on the other hand, have always been looked at as “second-rate projects” by bitcoin maximalists.

Until recently, Bitcoin has held the top spot without any serious competition since its creation in 2009. On February 24th, 2017, Bitcoin’s market capitalization represented 86.74% of the total market capitalization of all cryptocurrencies. BitDegree Learning Hub aims to uncover, simplify & share Web3 & cryptocurrency education with the masses. Join millions, easily discover and understand cryptocurrencies, price charts, top crypto exchanges & wallets in one place. Flippening is a perfect scenario for Ethereum fans because it is speculated that the total Ether market cap could outweigh the total Bitcoin market cap.

In turn, Ethereum was roughly triple the size of the third-largest crypto by market cap (as of this writing, Tether (USDT -0.01%), at just over $70 billion). Its creator, Satoshi Nakamoto (a pseudonym for a person or group of people), released a white paper describing how the digital currency concept would work in 2008 amid the turmoil of the Great Recession. Bitcoin officially launched in January 2009, and it has been the largest cryptocurrency ever since. There are 86.4 million non-zero balance ETH wallets and 42.8 million non-zero BTC wallets. This shows a user-generated network effect that can’t be ignored and is largely explainable be the amount of additional layers and applications that have been built on Ethereum.

While the flippening has not yet occurred, it remains a topic of interest and speculation within the crypto community. Market cap is a simple metric, but a lot of factors will need to come together to make the flippening happen. The price and number of Bitcoin and Ethereum in circulation will ultimately dictate market cap, but supply and demand is the real driver of a blockchain network’s total value. Ethereum has flipped Bitcoin if metrics like transaction count are considered.

While the price of the token doesn’t show it, the merge was a big success in a lot of ways. There’s no real way to know what will happen to other alt coins if a flippening occurs. It’s likely that initially, the whole market will experience significant volatility as everyone seeks to adjust to the change. At current speeds, the flippening could happen in the next five to ten years.

While bitcoin was intended to be an alternative currency to traditional money – working as a store of value – Ethereum is a platform for exchanging contracts, non-fungible tokens (NFTs) and creating applications. Ethereum uses its own currency – ether – which is used to buy and sell contracts. Flippening is an essential concept in cryptocurrency because it represents a potential shift in the market landscape. While it’s difficult to predict precisely when or if https://forexhero.info/ the Flippening will occur, it’s clear that both ETH and BTC have strong support and could potentially continue to jockey for the top spot. Ultimately, the outcome of the Flippening will depend on various factors, including the price of each cryptocurrency, adoption trends, and investor sentiment. Regardless of the outcome, investors and cryptocurrency enthusiasts must keep an eye on the Flippening and stay informed about the latest developments in the market.

Generally, the higher the market cap, the more people are interested in a particular cryptocurrency and the more valuable it is perceived to be. However, he also noted that this analysis ignores the rise of ethereum challengers and bitcoin as a monetary innovation, which typically has sticky network effects. New bitcoin scaling solutions could also help it to grab some of ethereum’s market share.

The concept of flippening revolves around the idea that the cryptocurrency market is dynamic and subject to constant change. Bitcoin has long been the dominant cryptocurrency, both in terms of market capitalization and public recognition. However, as the crypto space evolves, other cryptocurrencies have emerged with unique features and use cases, challenging Bitcoin’s position. Truth be told, it took some time to figure out what people mean by referring to the flippening. Consumers, investors, traders, and speculators have shown an appreciation for bitcoin these past few years, despite the cryptocurrency being far from perfect.