Join millions, easily discover and understand cryptocurrencies, price charts, top crypto exchanges & wallets in one place. 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.
It refers to the hypothetical moment when Ethereum (ETH) overtakes Bitcoin (BTC) as the largest cryptocurrency by market capitalization. While market cap is the primary metric used to determine the Flippening, it’s not the only one. Ethereum has flipped Bitcoin if metrics like transaction count are considered. 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.
- It has seen huge up and downs, from riding the wave to forgotten as a fad, again and again.
- Is centralization via “stakers” versus decentralization via miners the winning formula?
- Today, that percentage has dropped to 45%, while ether has seen its market share rise from 8.5% to nearly 20% now.
- 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%.
- The flippening is a term used to describe a potential “flip” in the largest cryptocurrency.
While there have been many attempts at creating a digital currency, bitcoin is by far the most successful. It is also the inspiration for every cryptocurrency https://bigbostrade.com/ that came after it. It’s a fun metric to explore, said Lex Sokolin, the global fintech co-head and head economist at ConsenSys, in an email.
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IPO flipping is somewhat discouraged with lock-ups and guidelines for beginning investors, but a new issue needs to have some flippers to create trading volume and market buzz post IPO. IPO flipping can also make financial sense, as many stocks see their highest prices in the first weeks and months after an IPO and may struggle for some time before returning to those peaks, if ever. Since the top of the 2017 bull run in crypto, non-zero balance growth in ETH has been nearly 900% while BTC non-zero growth has grown just 54.5% over the same time frame. This has no doubt contributed to the adoption of Ethereum as a crypto ecosystem and has helped close the market cap gap between the two coins. It isn’t just non-zero balances were ETH has seen faster growth than BTC. 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.
This flip in market cap could still play out even if Ethereum falls in value but Bitcoin’s value falls by an even greater percentage. Basically, it’s wise to exercise caution here since a potential flippening doesn’t make Ethereum a good investment. The flippening is a term used to describe a potential “flip” in the largest cryptocurrency. Specifically, it refers to the possibility of the second-largest cryptocurrency, Ethereum (ETH -1.69%), overtaking Bitcoin. 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.
But they actually both perform very different functions, bitcoin as a store of value and ethereum as a technology platform, he added. “I didn’t think it was going to happen [in May 2021] and I still don’t think it’s going to happen now,” Alfred said. “There’s no way that ethereum’s price is going to appreciate enough to how to trade on nasdaq catch bitcoin.” Insider spoke with crypto experts to help break down the concept of “flippening”. They shared their predictions on when it might happen and the market implications of the event. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.
In the chart above we see outperformance in ETH during bull runs and under performance during bear markets. What’s interesting during the current bear market is how well ETH has been able to keep the ratio under 2 despite the declines in coin prices. During the 2017 bull run, Bitcoin topped in December while Ethereum actually topped in January of 2018. In late January and early February, the BTC/ETH $100 minimum address ratio was down to 2.3. It took about a year for BTC’s ratio multiple to double from the February 2018 low.
Market Cap Ratio
A gently rising supply in the next couple of decades could also keep Bitcoin’s total value rising and prevent a possible flippening. Flipping has made fortunes in real estate, but it does seem to spawn more infomercials than it does easily replicated results. Flipping in a hot market is the riskier of the two, as hot markets can cool unexpectedly. If market conditions change before the property can be sold, then the real estate investor is left holding a depreciating asset. Although Bitcoin is the market leader, its grip on the cryptocurrency market has been loosening over time, allowing the dominance of Ethereum to grow.
Just one year after its initial release, Ethereum quickly grew to become the 2nd biggest coin by market capitalization. Despite the growth in network addresses with non-zero balances and $100 minimums, Ethereum’s market cap never actually eclipsed its high from 2017 against Bitcoin. Polygon, Arbitrum, and Optimism are all Ethereum layer 2 solutions that utilize Ethereum’s network. 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.
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While it’s difficult to predict precisely when or if 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.
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. After all, ETH is still the gas that is required for the transactions that those in the ecosystem are executing. Year to date, we’ve seen non-zero balance addresses grow 16.9% for ETH but just 9.5% for BTC. Looking out longer term though, the growth since the 2017 bull cycle top is staggering. Ethereum will continue to be the token with the beta (volatility) and if there is another leg down to the bottom of the crypto-winter it will lose more than bitcoin. When the bounce comes it will outperform bitcoin but it will follow and still likely lag the market cap of bitcoin.
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The material provided on this website is for informational use only and is not intended for financial or investment advice. ArcticLlama, LLC, FinanceGourmet.com, and Brian Nelson, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Cryptocurrencies are very volatile and should be considered high risk for any investment or trading purposes. The total USD value of fees paid to make a transaction on the network (100% means Ethereum has flipped Bitcoin in that metric). The Flippening is the hypothetical moment when Ethereum’s market cap surpasses that of Bitcoin, how it could potentially happen, and why it matters.
Only a legal professional can offer legal advice and Buy Bitcoin Worldwide offers no such advice with respect to the contents of its website. A cold wallet also referred to as “cold storage” is A device or system that secures crypto private keys offline. A hard fork is a significant change that permanently splits a blockchain into two different networks when the nodes fail to reach a consensus. Most cryptocurrencies and dApps in existence today are built on the Ethereum Network, as well as other innovative use cases like NFTs (Non-Fungible Tokens).
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. That being said, things are changing in the world of bitcoin and cryptocurrency. Bitcoin “maximalists” have held onto their BTC supply in the hopes of everything turning out to be alright.