The Flippening: What Crypto Investors Should Know About ETH Overtaking BTC

February 7, 2024 0 Comments

With the click of a button, anyone can populate and view the results of the election. We notice the exclusion of middlemen and intermediaries is a running theme when it comes to the blockchain. This was right after the 2008 global financial crisis that came about as a result of excessive risk-taking santander consumer usa holdings inc by the banking institutions entrusted with safeguarding funds. The result of this was fortunes lost and lives ruined with very little repercussion for the perpetrators. The total USD value of fees paid to make a transaction on the network (100% means Ethereum has flipped Bitcoin in that metric).

For example, Ethereum has a much larger transaction count than Bitcoin at the time of writing (October 2022). Another metric is the total transaction fees generated by the blockchains, where Ethereum has flipped Bitcoin by many multiples. In transactions volume, it briefly flipped Bitcoin during the 2021 bull run but has since retreated again. Market cap is an essential metric for investors and analysts because it gives them a sense of the size and value of a company or asset. In the case of cryptocurrencies, the market cap can also be a good indicator of adoption and demand.

  1. Both use cases are attractive, and the market will decide if digital oil or digital gold will be more in demand.
  2. Before we dive into the Flippening, it’s essential to understand the concept of market capitalization.
  3. “Some have argued that if ethereum were to absorb even 1% of the nearly $400 trillion global derivatives market, Ethereum would eclipse bitcoin’s current market capitalization,” Thorn said.
  4. Dencun is essentially the fusion of two separate upgrades – ‘Deneb’ and ‘Cancun’ together targeting improve…
  5. This form of ledger technology is what’s behind cryptocurrencies and other tech trends.

The Flippening does not necessarily mean that the value of Ether (ETH), Ethereum’s native currency, has to surpass Bitcoin’s value. Instead, its overall market capitalization has to outperform Bitcoin’s. This could occur if Ethereum’s value increases faster than Bitcoin, or if Bitcoin’s value falls by a bigger percentage than Ethereum’s. Reducing the supply of Ether over time could also potentially cause a Flippening, as the scarcity would increase its value. Ethereum is the second largest cryptocurrency by market capitalization, behind Bitcoin. The “Flippening” was coined in 2017 to describe the possibility that Ethereum’s overall market value could someday outweigh Bitcoin’s.

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). Pooltogether, a no-loss DeFi lottery, built a fun savings product that pools deposits and gives the interest accrued on the pool to a lucky winner every week. Pooltogether didn’t need to build much; it relied heavily on Compound and Dai — and didn’t need their permission. As of the end of June 2021, Uniswap has a total value locked of about $5b. For an attack to succeed, a majority of the copies of the blockchain would need to be amended simultaneously.

Active Addresses

“There were a bunch of ethereum VC type people and crypto DeFi type investors who were all calling for the flippening,” he said. “You can go back and look at right when ethereum was hitting $4,000, because there was a fever pitch for it.” Ethereum is largely inspired by Bitcoin, and is currently the second most valuable cryptocurrency with a market capitalization over $216B. Unlike in traditional organizations, the bylaws of a DAO are hard-coded in smart contracts and is absolute law. Members’ votes are tallied, and changes are implemented automatically without the need for an intermediary.

Why Is Murano Global (MRNO) Stock Up Over 130% Today?

Both use cases are attractive, and the market will decide if digital oil or digital gold will be more in demand. Get early market exposure to all crypto market segments, from Metaverse to DeFi with our cross-chain ecosystem. Aave is an open source and non-custodial liquidity protocol for earning interest on deposits and borrowing assets.

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. Despite a more than six-year head start for Bitcoin, Ethereum quickly skyrocketed into the No. 2 position in terms of largest cryptos on the market.

This completely removes the need for a third-party to guarantee trust. This website tracks and compares the two cryptocurrencies across 9 indicators. Tokens based on a blockchain, NFTs are used to guarantee ownership of an asset.

As of mid-2022, Bitcoin (about $575 billion) was more than double the size of Ethereum (almost $220 billion). In turn, Ethereum was roughly triple the size of the third-largest crypto by market cap (as of this writing, Tether (USDT 0.02%), at just over $70 billion). Although it is commonly referred to as Ethereum overtaking Bitcoin in market capitalization, there are several other metrics where the two blockchains can be compared. “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. “Some have argued that if ethereum were to absorb even 1% of the nearly $400 trillion global derivatives market, Ethereum would eclipse bitcoin’s current market capitalization,” Thorn said.

Total Transaction Fees

Its limited supply, in addition to its simplicity and acceptance makes it increasingly attractive to institutional investors. DeFi is perhaps one of the most interesting and fastest growing trends in the space. The general idea behind DeFi is the development of non-custodial financial products and services written in code and deployed on the blockchain. The transparency of the blockchain addresses both problems as it allows for real-time updates on vote count, while eliminating the need for expensive recounts.

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. The Flippening is the hypothetical moment when Ethereum’s market cap surpasses that of Bitcoin.

Ethereum has its own digital currency knows as Ether or ETH that facilitates transactions on the network. 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.

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