What Is The Ethereum Flippening? Will Ethereum Ever Surpass Bitcoin?
The “ETH Flippening” is a term coined in 2017 to describe a hypothetical scenario in which Ethereum surpasses Bitcoin in market cap. This would make Ethereum the largest cryptocurrency by market cap. Given the premise that Ethereum will serve as the base layer of the new Web3 and tokenized economy, this scenario is likely to unfold.
Currently, the Bitcoin market narrative is that of digital gold, a store of value. In contrast, a shift to Ethereum dominance would likely trigger a new narrative of utility-based value associated with blockchain and economic constructs. This would likely be a strong catalyst for the altcoin market, especially for projects built on Ethereum.
Do You Remember The Previous Crypto Cycle? Most Investors Don’t
Ethereum has established itself as the leading Layer1 blockchain. Solana is its only true rival. However, institutions seem to favor Ethereum as the base layer for a new economy. Its dominance seems set. However, can Ethereum’s dominance reach beyond the altcoin market? Can Ethereum eventually flip Bitcoin? That’s the question many are beginning to contemplate.
If you were involved in crypto back in 2017 and early 2018, you will remember that something quite significant took place. Ethereum came very close to flipping BTC and seizing the crypto crown. However, it was not the case, as alts began to shed their gains in 2018. BTC reached its peak in December of 2017, while alts continued to rise into 2018 before the crash. Had alts continued to rally a little longer, the outcome could perhaps have been different.
We are currently well into this cycle, and price action once again suggests ETH could realistically flip BTC. This is only made possible by a strong Altcoin Season. Without it, Ethereum stands very little chance of stealing the crown from BTC. However, given the right environment, Ethereum could surpass BTC in market cap.
Current Crypto Market Cap: What It Reveals About The Next Big Move
BTC’s market cap is currently over $1 trillion; the last time it was seen was in May of this year. The actual market cap at the time of writing is $1,115,633,232,323! This is incredibly impressive for a digital network that began with a handful of computers.
ETH, on the other hand, is really not that far off, as it is almost at the half-a-trillion-dollar mark! At the time of writing, the ETH market cap is $446,190,048,825. You can see how a strong Altcoin Season could realistically push Ethereum’s market cap beyond Bitcoin’s.
If you are familiar with altcoin price appreciation against BTC during a bull market, you will understand that this is not really much of an ask. Based on this metric alone, it is extremely likely that this scenario will play out this year or in early 2022! However, a significant development in either camp could change things. This market moves fast, and anything remains a possibility.
Ethereum Development Is Quietly Building Something Bigger
Since Ethereum’s early days, the network has seen significant upgrades and developments. These developments have mostly taken place recently, and though they are likely already priced into the current Ethereum price, I believe they still have a bullish effect on it.
The most significant being EIP-1559, which went live on the 5th of August this year. What makes this upgrade so important is that it actually changes Ethereum’s monetary policy. EIP-1559 incorporates burning the base fee, creating a deflationary dynamic. This is an important shift for Ethereum, and one that will hopefully help support ETH’s price.
ETH 2.0 staking also has quite a significant amount of ETH locked up in the staking protocol and pools. Currently, almost 7% of the supply is locked in the ETH 2.0 staking protocol. The removal of coins from the circulating supply usually has a bullish effect on price, as supply decreases.
All of these dynamics begin to work in unison, eventually causing the price to rise. There is obviously a lot of excitement regarding ETH being the base layer of a new economy, as well as DeFi and NFTs. However, Ethereum still has its challenges and is not quite ready for the task, in my opinion. It is, however, moving in the right direction.
Don’t Be Shocked If Ethereum Flips Bitcoin This Bull Run
At the end of the day, a lot is going on for ETH, and if you wake up one morning only to find ETH at the number 1 spot, you shouldn’t be that surprised. It may well happen during this bull market. However, if the market experiences another significant crash, it would probably be a short-lived victory. We will have to wait and see. Just remember that it is a strong possibility that should be factored in.
Final Thoughts
Can Ethereum flip Bitcoin? Realistically, yes. However, it is subject to a few dynamics playing out. Essentially, a strong Altcoin Season is the most significant catalyst. However, if bullish events and developments unfold for Bitcoin, it could make it less likely. The arrival of Bitcoin ETFs has clearly had a bullish effect on Bitcoin, reinforcing its dominance. However, there is still the possibility. I believe that the global tokenization of real-world assets will be the catalyst for pushing ETH to the top. We will have to wait and see. See you next time!
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