Thousands of blockchain projects have launched since the launch of Bitcoin, yet none of them has managed to overtake its position as the largest cryptocurrency so far. However, given the market’s volatility, this could change anytime. Crypto community members use the word “flippening” for this scenario – find out what it means below.
What Is Flippening?
The term “flippening” describes the possibility of the market capitalization of the second-largest cryptocurrency, ether (ETH), exceeding that of bitcoin (BTC).
What You Need To Know About Flippening
Ethereum emerged in 2015 and, despite Bitcoin having a nearly seven-year head start, it managed to become the second most prominent cryptocurrency on the market.
As for BTC, even though it has always been the top cryptocurrency, its market dominance dropped significantly throughout the past years, especially in mid-2017 and early 2018. This was one of the periods when Ethereum supporters were expecting the flippening to occur.
The key factors that are driving the speculations regarding Ethereum’s flippening include its enhanced flexibility compared to Bitcoin and its ability to write smart contracts.
As mentioned in the flippening definition, the market cap is the defining factor in the scenario of ETH overtaking BTC. This metric refers to the total value of a given cryptocurrency and is calculated by multiplying the number of coins in circulation by the current price per coin.
While the market cap is a straightforward metric, there are other factors, such as supply and demand, that need to come together for the flippening to happen. In general, if Ethereum usage continues to rise and its supply contracts, it could mean that the big switch has a significant likelihood.
However, it’s not a must for ether’s price to increase. The flippening could also be possible if ETC’s value decreases yet Bitcoin’s value drops by an even greater percentage. Thus, it’s critical to exercise caution, as the flippening doesn’t guarantee that ether is a good investment.
