The history of the cryptocurrency domain is so long at the present moment that it can begin its retelling of stories. This process is well known in many domains of history, as it showcases a very natural and human need to rehash and reshape stories that come from a different time and a different context. Like other digital-only spaces, including social media and esports, cryptocurrencies and even its oldest representative – bitcoin – simply did not have enough years of development to provide such a form of history. Today, the situation seems different as many events transpired in the previous 12 years or so.
Because of that, many are not surprised that the concept of crypto flippening is again on the conversational menu. It has been nearly four years since this idea first took root, but now it appears that the same root is spurting out new branches once again. Some of the theories behind the idea of ethereum taking over bitcoin’s dominant market position are nearly laughable (even though it is better not to laugh at anything in crypto). Other ideas, however, are much closer to reality and could offer some general insight into the crypto markets today, even if their visions of the immediate future of the ethereum network do not come to pass.
As the potential of flippening – which is the reversal of BTC and ETH in position one and position two by both market capitalization and token price – becomes more prevalent, the issue once again boils down to differences. These differences in this case mean the strength and disadvantages of both bitcoin and ethereum as global cryptocurrencies. For years, the blockchain digital currency domain has been dominated by the bitcoin network. It continues to be the market leader, but also the starter of crypto conversation and a dominant force by any accessible metric. It possesses a market capitalization of over one trillion USD at this point and is a household name in most parts of the world.
Even though many do not understand a range of nuances related to the same cryptocurrency, most have at least heard about it by now. At the same time, other leaders of the industry, like Tesla Motors are now actively investing in it and also accepting it for the purpose of in-house purchases. That is why anyone can today order a Tesla vehicle and pay for it through BTC. This could cause anyone to conclude that the same cryptocurrency is completely safe in its position of dominance. However, the same mantle is both heavy and comes with a range of conditions. Presently, the same conditions are changing somewhat and many see an even bigger potential in those changes.
Ethereum did come to the party a few years after bitcoin, but it worked quickly to make up for that difference. In a space of only a few years, it became the undisputed second-biggest crypto in the world, which was a ranking that many other promising blockchain networks aimed at. This included bitcoin cash, which came about from a hard fork splintering from the main bitcoin network. However, even BCH did not have what it takes to compete with the ultimate advantage that ethereum has – its technical backing and strong basis. Today, many decentralized finance applications and other platforms that utilize crypto in some shape or form have their basis in ETH tokens.
With elements like smart contracts and the ability to allow other cryptocurrency networks to use its native token as its foundation, ethereum really does offer something completely different and novel for the developer scene. That is something that many blockchain programmers recognized immediately, but the rest of the world is still not perceiving compliance. Even though the ETH token recently broke the price level of 3,000 USD for the first time ever, many believe that it is still dramatically undervalued. The same notion is the many roots for the flippening theory.
Reversal of Roles
The bitcoin boom of 2021 can in many ways be attributed directly to the decision of companies and other institutional entities to openly invest money into crypto. That crypto is and continues to be for the waste majority of companies bitcoin exclusively. That is an effect that ethereum needs for the flippening to happen. It too must come to the radar of company treasuries where it would join stocks, bonds, and even bitcoin.
However, it needs another element as well, because the first move would only double or triple the current price down the road, leaving it still at five or six times what bitcoin is worth now. Ethereum also needs drastic and widespread developer adoption along with institutional investors. Without both factors, ETH might see some spectacular successes in terms of price value and market capitalization, but it stands no chance of becoming the dominant cryptocurrency.
Lastly, there is another factor to the idea of the flippening. For better or worse, the entire process of the crypto market rise inside of the bull periods, or its downfall during the bear ones is an interconnected system. That means that there are no individual cryptocurrency successes that come in the long-term on the backs of other tokens. The same goes for the moment when a successful cryptocurrency somehow pushes down other ones. That simply does not happen over a prolonged period because the success of one token is the success of all of them.
A huge rise in adoption – relative to the overall numbers, of course – is usually the direct result of any spectacular rise in price. The dogecoin mania is perhaps the best-known example currently of that phenomenon. This joke cryptocurrency is quickly gaining value in any massive market movement, no matter where it originates. Also, in a similar way how ethereum appeared to improve the offer of bitcoin, something will appear to improve ethereum as well. Things that are open for improvement include the speed of transaction and scalability. As this takes place, the core underlying value of the ethereum network will go down, but the value of the overall crypto space will again go up.