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Even though market cap is the main metric to determine “The Flippening” (above), there are a number of other metrics that can be observed (below). Ethereum would only need to capture a fraction of the traditional finance or global art market to dwarf bitcoin’s total market capitalization over time, he said. Until recently, Bitcoin has held the top spot without any serious competition since its creation in 2009. On February 24th, 2017, Bitcoin’s market capitalization represented 86.74% of the total market capitalization of all cryptocurrencies. He added that, given its expansive goals, it might be likely for ether to surpass bitcoin in terms of market cap, though it may not have the largest network effect by other means. At earlier points in 2017, bitcoin accounted for more than 80% of the total cryptocurrency market share, though this figure has been higher than 90% at times.
In traditional organizations, starting a business with other people is trust-based, and is sometimes, fraught with problems and risks especially when money is involved. A smart contract is a set of instructions written in computer code that runs automatically all parts of an agreement and may be used to automate the agreement between parties. This completely removes the need for an intermediary since the outcome is pre-determined.
Transaction Count
The general idea behind DeFi is the development of non-custodial financial products and services written in code and deployed on the blockchain. DAOs are entities run by a community of people with shared goals without a centralized leadership or hierarchy. The transparency of the blockchain addresses both problems as it allows for real-time updates on vote count, while eliminating the need for expensive recounts. With the click of a button, anyone can populate and view the results of the election.
He has worked for financial institutions including State Street, Moody’s Analytics and Citizens Commercial Banking. An author of over 1,000 publications, his work has appeared in Forbes, Fortune, Business Insider, Washington Post, Investopedia and elsewhere. An advocate of financial literacy, Charles created all the industrial finance training for a company with more than 300 people and spoke at industry events across the world.
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DeFi Composability
Both use cases are attractive, and the market will decide if digital oil or digital gold will be more in demand. So, it’s unlikely that either Bitcoin or Ethereum will have a big change in their supply. That means that for Ethereum to become more valuable than Bitcoin, it will need to be worth more than 0.17 Bitcoins for each Ethereum. This competition is creating an incredible variety of crypto projects, and the demand for them will only increase.
In 2019, something like a “flipped Bitcoin” occurred; the transaction count on the EPC-20 network exceeded the transaction volume on Ethereum itself. Also, decentralized applications and projects are attracting more and more investors, which gives Ethereum more and more prospects. Ethereum is largely inspired by Bitcoin, and is currently the second most valuable cryptocurrency with a market capitalization over $216B. Despite a more than six-year head start for Bitcoin, Ethereum quickly skyrocketed into the No. 2 position in terms of largest cryptos on the market. As of mid-2022, Bitcoin (about $575 billion) was more than double the size of Ethereum (almost $220 billion).
How the Flippening Could Happen:
As with other investment options in the burgeoning crypto economy, potential investors should weigh the risks of buying cryptos such as Bitcoin and Ethereum. Crypto prices are volatile and will likely continue to be since the technology is still developing and rapidly changing. If you decide to invest at all, most investors should make crypto holdings part of a larger diversified portfolio strategy. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. Mashinsky isn’t the only person that believes there’s more potential for ETH than BTC in the future.
The Flippening – Market Cap
- The term was crafted in 2017 to describe a potential situation in which Ether might become the largest cryptocurrency in the world.
- Until recently, Bitcoin has held the top spot without any serious competition since its creation in 2009.
- “The Flippening” refers to the possible future event when Ethereum overtakes Bitcoin to become the most valuable cryptocurrency in terms of market capitalization.
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- Ethereum would only need to capture a fraction of the traditional finance or global art market to dwarf bitcoin’s total market capitalization over time, he said.
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This Market Cap Ratio is dynamic and may fluctuate due to a host of various reasons. The value of a coin may go up or down and is also respondent to the number of coins that have been mined off the blockchain. These value fluctuations accurately indicate a degree of volatility within the crypto market, however, larger coins that have a python math libraries market cap value greater than 10 Billion are considered to be more stable.
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This flip in market cap could still play out even if Ethereum falls in value but Bitcoin’s value falls by an even greater percentage. Basically, it’s wise to exercise caution here since a potential flippening doesn’t make Ethereum a good investment. Petar Zivkovski, COO of leveraged cryptocurrency platform Whaleclub, asserted that ether’s price is tied heavily to the ICOs that use the alternative asset protocol. Currently, blocks in bitcoin’s blockchain can Etf trading strategies only include up to 1 MB of transaction date, meaning that they can only process a fixed number of exchanges. For example, if there are 10 million BTC in circulation, and the price of each BTC is $10,000, the market cap of BTC would be $100 billion.
Charles Hayter, co-founder and CEO of cryptocurrency exchange service CryptoCompare, was also optimistic that ethereum could become the dominant blockchain. Although it is commonly referred to as Ethereum overtaking Bitcoin in market capitalization, there are several other metrics where the two blockchains can be compared. Flippening is when the market capitalization of one cryptocurrency begins to exceed the market capitalization of another cryptocurrency.
“The term ‘flippening’ began appearing build your own custom crm software without coding in social media such as Twitter and Reddit in February 2017,” said EQONEX’s Ting. These conditions make the flippening more likely, according to crypto experts. Most cryptocurrencies and dApps in existence today are built on the Ethereum Network, as well as other innovative use cases like NFTs (Non-Fungible Tokens). Pooltogether, a no-loss DeFi lottery, built a fun savings product that pools deposits and gives the interest accrued on the pool to a lucky winner every week. Pooltogether didn’t need to build much; it relied heavily on Compound and Dai — and didn’t need their permission.