Flippening, this term has gained popularity in the cryptocurrency world as investors speculate about the possibility of Ether (ETH) overtaking Bitcoin (BTC) as the dominant crypto. Is this likely to happen?
What is flippening?
Flippening is a term coined in 2017 and used in crypto to refer to a potential tipping of the largest cryptocurrency (Bitcoin that is) in terms of capitalization. The term specifically refers to the possibility of the Ethereum blockchain’s Ether surpassing the capitalization of Bitcoin (BTC).
The market capitalization of a cryptocurrency is its outstanding supply (number of coins) multiplied by its current price.
Although BTC has always been the leading cryptocurrency in terms of market capitalization, its market dominance has dropped year by year, from 95% in 2013 to less than 40% by 2022.
It was in mid-2017 that Bitcoin lost its strength and other cryptocurrencies managed to regain market share. One crypto-currency in particular stands out, the Ethereum blockchain’s Ether. The Ethereum community was then hoping during this period that ETH would manage to overtake BTC in terms of capitalization, that it would therefore succeed in the flippening.
On June 18, 2017, Bitcoin’s dominance reached one of its lowest points, at 38.69% of the market. At the same time, Ether’s dominance of the entire cryptocurrency market explodes to over 31.22%. This gap of only 7.5% will never be recovered. Ether has never been so close to dethroning Bitcoin as the number one crypto on the market.
Will the flippening ever happen?
It is not possible to know when or if the flippening will occur, as the capitalizations of Bitcoin and Ether are subject to a wide range of factors, including their adoption and general market conditions.
The correlation between the two cryptocurrencies will have to decrease for Ether to ever hope to dethrone Bitcoin. Indeed, even today, if the price of Bitcoin begins to rise or fall, so will Ether.
Moreover, some in the crypto-community believe that the greater utility of the Ethereum blockchain, especially with its smart contracts, will irrevocably lead to Bitcoin losing its top spot.
However, Bitcoin draws its strength from the fact that it is the digital equivalent of gold. Bitcoin remains the most reliable store of value of all the crypto-currencies (except for the specific case of stablecoins).
It is impossible to predict whether or not the flippening will ever occur, but it will be important to watch the dominance of the major crypto-currencies over the others as regulations are rolled out around the world.
