Ah yes! Another jargon in the world of cryptocurrency, Crypto Flippening. As the term suggests, it is derived from the word flip. It can be compared to the term acquisition in the business world. Crypto Flippening essentially means one cryptocurrency takes over the other in market capitalization. The market capitalization value of a particular cryptocurrency is calculated by multiplying its current market worth by its circulating supply.
The term came into the market with Bitcoin losing its grip on the crypto market and Ethereum seeing it as an opportunity to capture the market. As per statistics given by a platform known as Blockchain Center, Ethereum has achieved 60.1% of its Bitcoin Flippening Journey based on metrics such as market capitalization, transaction count, node count, total transaction fees, active addresses, transaction volume, trading volume, and Google Search Interest.
In addition to the market capitalization ratio, another metric is considered while considering whether ‘The Flippening’ is eventful soon or not. The number of coins currently in circulation in the market is also evaluated in this decision.
Even though Bitcoin and Ethereum have similarities like decentralization, traded via online exchanges, stored in cryptocurrency wallets, etc., they also have unique features that distinguish them from each other. Bitcoin was launched as an alternative to traditional money, whereas Ethereum was established to create applications and exchange NFTs and contracts. For the reader's convenience, NFTs are non-fungible tokens that allow users to have complete ownership of their digital assets without the fear of being misused without permission.
Ethereum has advantages over Bitcoin, like faster transaction speed, lesser energy requirements and a much vibrant developer community amongst others.
The possibility of this event was first seen in the year 2017. Rumors were in the rounds that some other coin is about to be launched in the crypto market and might threaten the growing ecosystem of Bitcoin. This coin was anticipated to be Ethereum, and adding to the joy of Ethereum investors, Bitcoin’s value witnessed a slight drop in 2018. Currently, this term has been expanded to all forms of cryptocurrency.
Ethereum is the strongest competitor for Bitcoin and has a high probability of achieving the theoretical ‘Flippening.’ However, it is still way behind the dominance established by Bitcoin in the crypto market. It is said that internal flippening already took place as early as 2019 when ERC-20 transactions overtook the number of Ethereum transactions.
As per recent news, ‘The Flippening’ is predicted to happen in the next five years. According to some reports, the event might take place this year, i.e., in 2022. The reason for this prediction is Ethereum’s completion of the switch to the Proof-of-Stake (PoS) consensus algorithm, which might significantly boost the coin’s market value. However, it was also predicted to occur last year but didn’t happen. This prediction was because, in 2021, Bitcoin's value doubled while Ethereum increased five times. However, this probability is still debatable as Bitcoin’s current market value is approximately $430.69 billion, which is more than Ethereum’s current market value of $194.77 billion.
In the event of a flippening taking place, initially, the entire crypto market is predicted to face high volatility. The prices of the altcoins will no longer be based on the price of Bitcoin. This system was in place because Bitcoin was the first cryptocurrency introduced in the market and was a source of inspiration for all cryptocurrencies that followed.
Let’s see what the future of cryptocurrency has in store for crypto enthusiasts and investors. Meanwhile, you can read our other blogs to learn more about the crypto world and its jargon.
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