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. Before we dive into the Flippening, it’s essential to understand the concept of market capitalization. Market cap is a measure of a company’s or asset’s value, calculated by multiplying the price of a single unit by the total number of units outstanding. In the case of cryptocurrencies, the market cap is determined by multiplying the price of a single coin by the total number of coins in circulation.
Subscribe to the Market Insights newsletter
New bitcoin scaling solutions could also help it to grab some of ethereum’s market share. Today, that percentage has dropped to 45%, while ether has seen its market share rise from 8.5% to nearly 20% now. Flippening is an essential concept in cryptocurrency because it represents a potential shift in the market landscape.
Best 6 Crypto Trading Signals Telegram Channels
The flippening is a term used to describe a hypothetical event where one cryptocurrency surpasses another in terms of market capitalization. While the flippening between Bitcoin and Ethereum has not yet occurred, it remains a topic of interest and speculation within the crypto community. Factors such as market capitalization, technological advancements, network activity, and regulatory environment can influence the likelihood of a flippening.
BitDegree 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. 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. Even though Bitcoin is the first cryptocurrency and it has the biggest market cap at the moment, in 2018 it was plunged at certain points which gave Ether fans the idea that the flippening could occur in the future.
Potential Factors for Flippening
- Analysts queried by CoinDesk largely believe ethereum’s ether token is most likely to spur the change, given it has increased 3,000% this year with no signs of slowing.
- “But what we don’t know yet is ethereum versus solana, ethereum versus luna, ethereum versus polkadot, how the level one battle is going to turn out.”
- The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation.
- Bitcoin’s market value moved from $600 billion to just under $1.2 trillion with price surging 100% from the start of the year.
- It could show that the market is maturing, and that other assets are becoming more attractive to investors.
By contrast, Bitcoin has a hard cap of 21 million coins, which will be reached in 2040. A bitcoin price chart and tables gently rising supply in the next couple of decades could also keep Bitcoin’s total value rising and prevent a possible flippening. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation.
Imagine you are playing a game of musical chairs Stop-loss and the person who sits in the leader’s chair changes each time the music stops. Similarly, in the crypto market, the flippening refers to the potential event of a new cryptocurrency surpassing Bitcoin as the most valuable and widely used cryptocurrency in the market. It’s like in the game of musical chairs, the leader keeps changing, in the crypto market, the leader in terms of market capitalization and adoption can change as well.
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. The term was crafted in 2017 to describe a potential situation in which Ether might become the largest cryptocurrency in the world. 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.
He added that, given its expansive goals, it might be likely for ether to surpass bitcoin in terms of market cap, though it may not have the largest network effect by other means. If a flippening were to occur, it would represent a major shift in the crypto world and could have implications for the future of digital assets. Therefore, it is an event worth watching closely as the industry continues to evolve. The term “Flippening” refers to discover the different strategies available for trading cfds the hypothetical moment of Ethereum (ETH) overtaking Bitcoin (BTC) as the biggest cryptocurrency.