What is Flippening? Definition & Meaning Crypto Wiki

Ethereum is trying to be a network that supports many other coins and uses cases besides money. As it stands, there is no reason to compare Bitcoin and Ethereum as competitors because they have two different goals. There are a number of factors that could prevent it from happening, such as a surge in the price of Bitcoin, or Ethereum’s lack of a hard capped coin supply. Mashinsky isn’t the only person that believes there’s more potential for ETH than BTC in the future.

Bitcoin is the most successful crypto on the market – and the first – while Ethereum sits in second place. Bitcoin currently has an aggregate value of £598.9 billion, and Ethereum has a value of £296.4 billion. Get early market exposure to all crypto market segments, from Metaverse to DeFi with our cross-chain ecosystem. This would make those offerings open, transparent and accessible to all without the need for middlemen. Examples of financial products include lending services, exchanges, derivatives and insurance.

“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. Two years ago, bitcoin accounted for almost 67% of the total crypto market. Today, that percentage has dropped to 45%, while ether has seen its market share rise from 8.5% to nearly 20% now.

Instead, a more competitive cryptocurrency ecosystem will be created, and altcoins are expected to significantly rise in value over the next few months and years. Ethereum, Monero, Dash, Factom, and others are all trying to find their place in the world right now. Nearly all of these currencies have risen in value despite bitcoin’s price either stagnating or going down. While it is possible this is just a temporary change, the flippening is not a trend that should be ignored by any means.

  1. “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.
  2. As with other investment options in the burgeoning crypto economy, potential investors should weigh the risks of buying cryptos such as Bitcoin and Ethereum.
  3. In traditional finance, banks are a necessary intermediary, and are trusted to maintain a ledger which keeps a list of transactions.
  4. Before making financial investment decisions, do consult your financial advisor.

The exact origins of “the flippening” are difficult to pin down, but several experts link it to the 2017 bull run. These conditions make the flippening more likely, according to crypto experts. His passion for finance and technology made him one of the world’s leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector. 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.

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While Bitcoins could still be worth more in dollar terms, the total market capitalization of all coins added together would flip. The term “Flippening” has been gaining much attention in cryptocurrency in recent years. It refers to the hypothetical moment when Ethereum (ETH) overtakes Bitcoin (BTC) as the largest cryptocurrency by market capitalization.

The Flippening — What it is and why it matters

Both use cases are attractive, and the market will decide if digital oil or digital gold will be more in demand. Either way, the flippening is much more interesting as a funny phrase than it is as a real world event.

A 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. Bitcoin’s functionality is considerably more linear and simplistic when compared to the technological innovations offered by Ethereum. However, Bitcoin was the first cryptocurrency ever created and is by far the most well known, and looks set to continue to dominate crypto in the near future. At the end of the day, Ethereum and Bitcoin are aiming to be two very different things.

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This ensures that the applications are not controlled by a single entity or authority and instead, are community-driven. Bitcoin 3.0 represents the next evolutionary phase of Bitcoin mining, characterized by its potential to bec… Trust Wallet is a crypto wallet software that gives its users complete ownership of their crypto funds.

It’s worth saying a lot of people thought it could happen last year and it didn’t. “I view the two as distinct, and whether they ‘battle’ for the top spot on CoinMarketCap amana capital broker is more noise than signal,” Thorn said. “The term ‘flippening’ began appearing in social media such as Twitter and Reddit in February 2017,” said EQONEX’s Ting.

What will happen to bitcoin if there is a flippening?

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 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.

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. If Ethereum usage continues to rise, and supply begins to contract, these two forces combined could lead to a flippening. However, bear in mind that a flippening scenario doesn’t necessarily mean Ethereum price would go up. 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.

How Will the Flippening Happen?

This indicated that while still very improbable, it was possible that Ethereum could surpass the value of Bitcoin. Sign up for BlockChain Reaction now with a free two week https://forexhero.info/ trial and position yourself for the next bull. Volume, specifically trading volume, refers to how much of a specific asset has been traded within a specific timeframe.

While I still believe we’re a couple years away from Ethereum overtaking Bitcoin by market cap, I do think it could be argued the “flippening” has already happened when it comes to users. Ethereum is still in command of the NFT market judging by sales volume and buyer metrics. But if you believe crypto is here to stay, Ethereum is going to continue to be a top layer 1 smart contract chain in the industry. ‘The flippening’ is the term used to describe the hypothetical event in which ether – the coin of the Ethereum network – becomes more valuable than bitcoin.

This would be measured in market capitalisation, which is the total number of crypto tokens in circulation, multiplied by the value of a single token. Flippening is a term used in the cryptocurrency world to describe a hypothetical event where the market capitalization of one cryptocurrency surpasses that of another. It is often used to refer to the possibility of Ethereum overtaking Bitcoin as the largest cryptocurrency by market cap. The term “flippening” is derived from the idea that the positions of the two cryptocurrencies would “flip” in terms of market dominance.

An automated market maker defines the underlying protocol that provides liquidity to decentralized exchanges and determines asset prices. StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. In terms of market price, the two still seem worlds apart – BTC trades at around £31,693 as of January 6, while ETH sits at just £2,481 – but the supply of each coin has a big sway on their market cap. The Flippening is crucial because it would represent a significant shift in the cryptocurrency landscape.

And both use an open-source distributed ledger to record transactions in, known as blockchain. 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.

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