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- The flippening is unlikely in terms of market capitalization, but nonetheless possible.<\/i><\/li>\n
- The flippening can also refer to different stats such as daily trading and transaction volume, as well as other areas.<\/i><\/li>\n
- A flippening could have an impact on the wider crypto ecosystem in various ways.<\/i>
_____<\/i><\/li>\n<\/ul>\nIt sounds like the name of some obscure horror movie, but \u2018the flippening\u2019 is something that continues to generate plenty of debate in crypto circles. In fact, now that Ethereum (ETH)<\/u><\/a> is close to its long-awaited shift to proof-of-stake<\/u><\/a>, it has begun attracting more attention than ever before, particularly amid claims that ETH will become a deflationary asset following this shift.\u00a0<\/p>\n
This is certainly a contentious issue, particularly when \u2018the flippening\u2019 can mean more than one thing. Yet there\u2019s general agreement that ETH will flippen bitcoin (BTC)<\/u><\/a> on at least some metrics, even if there\u2019s plenty of disagreement as to whether it will become more valuable in terms of market capitalization.<\/p>\n
At the same time, commentators tend to agree that even if the flippening does happen (at least in some respects), it wouldn\u2019t diminish BTC\u2019s current status as a store of value.<\/p>\n
The flippening: what does it even mean?<\/h2>\n
\u201cThe notion of ethereum \u2018flippening\u2019 bitcoin has been around since at least 2017. In the original sense, it meant that ethereum would become a number one cryptocurrency on coin ranking sites such as CoinMarketCap<\/strong>,\u201d said Josef Tetek, Brand Ambassador at SatoshiLabs<\/strong> and Trezor<\/u><\/strong><\/a>.\u00a0<\/p>\n
In this sense, ETH would need to reach a price of BTC 0.156 per unit in order to flippen its rival, although, at the time of writing, it stands at around BTC 0.0774. It means that ETH should more than double in price while the price of BTC should stay at the same level. Given this gap, Tetek sticks his neck out and says he doesn\u2019t think a flippening in this sense \u201cwill ever\u201d happen.<\/p>\n
\u201cEthereum has briefly reached a price level of ~0.14 bitcoin in June 2017 and has posted lower highs since then,\u201d he told Cryptonews.com<\/i>.<\/p>\n
Other industry figures take more of a mixed view. That is, they think the flippening is unlikely in terms of market capitalization, but nonetheless possible.<\/p>\n
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\u201cSome say that because ethereum will be deflationary after the Merge, it will then have the same characteristic of scarcity that made bitcoin soar — AND because in addition, ethereum also has actual utility as gas for a settlement layer — these two things combined will make ethereum more valuable than bitcoin ultimately,\u201d said Boolean Fund<\/strong> general partner Mark Jeffrey.<\/p>\n<\/blockquote>\n
For Jeffrey, there is a chance that, post-Merge, Ethereum becomes the primary \u2018cash-like\u2019 settlement layer for much of the crypto ecosystem.\u00a0<\/p>\n
\u201cBut that is still far from a done deal, however — Ethereum is still slow and unscalable, and it has a year or two to go yet to catch up to Avalanche<\/u><\/a>, BNB<\/u><\/a> [chain], Solana<\/u><\/a>, Fantom, and others that are fast, cheap, scalable and here now,\u201d he told Cryptonews.com<\/i>.<\/p>\n
That said, \u2018flippening\u2019 doesn\u2019t necessarily mean ethereum overtaking bitcoin in terms of market capitalization. As Polygon (MATIC)<\/u><\/a>, an Ethereum scaling platform, co-founder Mihailo Bjelic explains, it can also refer to different stats such as daily trading and transaction volume, as well as other areas.<\/p>\n
\u201cRecently, ether flipped bitcoin in the options market for the first time, reaching a total of USD 5.7bn in open contracts versus bitcoin\u2019s USD 4.3bn. This shows that ETH is seemingly becoming a more popular trading tool than BTC,\u201d he told Cryptonews.com<\/i>.<\/p>\n
Bjelic also suggests that ethereum will only gain momentum following the Merge, meaning that we may eventually have to update our conceptions of what\u2019s possible.<\/p>\n
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\u201cAdditionally, Ethereum might as well flippen Bitcoin in terms of its prominence and importance for the industry. Bitcoin is the project that started the industry and as such is incredibly significant, but the astounding level of innovation, use cases and adoption happening in Ethereum might easily make it the flagship project and the first association when our industry is mentioned,\u201d he added.<\/p>\n<\/blockquote>\n
What happens to Bitcoin if Ethereum overtakes it?<\/h2>\n
Assuming that Ethereum flippens Bitcoin in one way another, how would this affect the latter? Would any flippening somehow affect BTC\u2019s value or standing?<\/p>\n
\u201cIt would be about Ethereum becoming more valuable, and would not diminish Bitcoin,\u201d argued Mark Jeffrey, who added that both cryptoassets\/platforms serve two very different economic functions.<\/p>\n
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\u201cBitcoin’s proof-of-work<\/u><\/a> will always retain the very highest degree of imperviousness and security. That could become increasingly valuable in the coming years — it should not be underestimated,\u201d he said.<\/p>\n<\/blockquote>\n
Mihailo Bjelic agrees with this analysis, affirming that Bitcoin\u2019s inherent value lies in its potential to be a quasi-gold standard and store of value.\u00a0<\/p>\n
\u201cAt the same time, Ethereum serves as the backbone of Web3<\/u><\/a>, propping up the DeFi<\/u><\/a> and NFT<\/u><\/a> ecosystems, among others, that comprise numerous interconnected platforms. So this is more about Ethereum increasing in value rather than Bitcoin losing its own,\u201d he said.\u00a0<\/p>\n
Josef Tetek takes a stronger view in Bitcoin\u2019s favor, particularly when Ethereum will be moving to proof-of-stake soon enough, which in his view isn\u2019t as robust as proof-of-work.<\/p>\n
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\u201cI don\u2019t think Ethereum is sufficiently decentralized to stay neutral and permissionless – and I fear its upcoming move to a proof-of-stake consensus mechanism will make it even more vulnerable to a regulatory capture, as the stake seems to be concentrated among a handful of institutions,\u201d he said.<\/p>\n<\/blockquote>\n
Effect on the wider crypto ecosystem<\/h2>\n
While a flippening may not really harm Bitcoin\u2019s position and its inherent value proposition, it could have an impact on the wider crypto ecosystem in various ways.<\/p>\n
\u201cI don\u2019t think that any kind of flippening would \u2018harm\u2019 crypto, but it may reduce the appeal of competing layer-1s [base protocols], i.e. Ethereum competitors. One possible shift in focus would be taking cryptocurrency from a single popular use case to a multitude of use cases that Ethereum and solutions like Polygon can support,\u201d said Mihailo Bjelic, who claims that such a shift would be very beneficial for the industry.<\/p>\n
Mark Jeffrey also says that any kind of flippening would be a net positive for crypto, since it would ultimately mean that Ethereum has attracted more usage and adoption. And given that the crypto market tends to rise and fall more or less as a whole, it would likely increase usage and adoption across the board.<\/p>\n
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He says, \u201cAny crypto ecosystem succeeding wildly is good all around — it only increases adoption and innovation. Some parties will always value bitcoin’s better security — as ethereum is more broadly used, some percentage will always take their winnings and store it in native bitcoin for increased security.\u201d<\/p>\n<\/blockquote>\n
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Learn more:\u00a0<\/strong>
– Analysts Advise Ethereum Users to Avoid Transacting on Merge Day, Outline Numerous Risks<\/a>
– No \u2018Black and White\u2019 Answer to the Proof-of-Work vs. Proof-of-Stake Question, Says Kraken<\/a><\/p>\n– Major Bitcoin & Crypto Companies Warn of ‘Extreme’ Risk in Proof-of-Stake Systems<\/a>
– The Compromises and Benefits of Ethereum Switching to a Proof-of-Stake Network<\/a><\/p>\n– \u2018PoS Fanatics Attacking PoW are Actual Supervillains\u2019, Kraken\u2019s Powell Says as US Politicians Charge<\/a>
– Ripple\u2019s Exec Campaign Has \u2018Zero Chance\u2019 of Forcing Bitcoin to Proof-of-Stake, But Brace for More Attacks<\/a>
– A Closer Look at the Environmental Impact of Bitcoin Mining<\/a><\/p>\n– Top Narratives About Ethereum and Its Merge with Its Proof-of-Stake Beacon Chain<\/a>
– Ethereum’s Merge Could Lower Demand for Bitcoin but Regulatory & Technical Challenges Persist<\/a><\/p>\n<\/p><\/div>\n - The flippening can also refer to different stats such as daily trading and transaction volume, as well as other areas.<\/i><\/li>\n