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Flippening meaning and usage
Flippening means that an underdog overtakes the favorite. It refers to the potential overtake of Ethereum to become the world’s biggest cryptocurrency by market capitalization over the previously favored Bitcoin.
This is a pretty big matter for crypto because Bitcoin was the first blockchain and has so far maintained the largest market cap since the beginning.
The term got famous because Bitcoin had a hit and lost some points in the crypto market. This event gave rise to the idea that investors could shift to Ethereum and flippening might happen.
Many investors were really happy because the Ethereum Blockchain is considered to be quite versatile and has advantages that include but are not limited to smart contracts.
Over time you will see broader adoption of Ethereum than of BitcoinAlex Mashinsky, CEO of Celsius Network
The Ethereum Flippening incident of 2019 ⚡️
In November 2019, a certain degree of flippening occurred. It happened because the transaction for ERC-20 was more than the ETH-based transactions itself.
It was reported that ERC-20s had about 303,000 daily transactions vs about 290,000 for “ETH”. This means that the Ethereum Blockchain has been rapidly increasing in overall crypto valuation. Due to the increase in its value, it has attracted many investors towards it.
But still, it does not look like ETH is going to overtake BTC in the immediate future because both blockchain are moving in the same direction of the macro environment and dodging inflation at the moment.
Indeed Bitcoin is less applicable in the broader web3 and crypto ecosystem because it does not support the development of smart contracts, which is one of the few things giving an edge to the Ethereum Blockchain.
What are the factors affecting flippening?
One of the principal concepts in economics, demand is an interesting and pivotal factor that impacts flippening. Take Ethereum’s smart contracts, for example. Not only was this feature greatly marketed (and rightfully so), but it also had multiple uses. Thus, products and new launches in blockchains can affect the demand curve to a great extent.
2. Filling the gap
Not only is it important to have a product with multiple uses, it is also integral to be strategic about it. Filling the gap between the market and a certain blockchain that is always at the top can also affect the phenomenon of flippening. Ethereum’s MetaMask proved to be a great addition and something that was adapted quickly in the booming crypto market.
3. Investor sentiment
While technological advancement has its own value, it all comes down to what the investors and traders want. If, for some reason, investors feel that Ethereum is a better blockchain and more investible product than Bitcoin, it becomes difficult for the decision to be reversed. It is all in the hands of the investors at the end of the day.
4. Competition is never bad
The other important factor is competition. If Ethereum happens to be doing exceptionally well but we see that there is rising competition from all four sides, it will affect Ethereum’s capability to substitute Bitcoin.
In conclusion, the flippening in crypto refers to the potential scenario in which Ethereum overtakes Bitcoin in terms of market capitalization. While many different factors are into play in the phenomenon that is flippening, predicting such an instance is a little tricky.