The term "flippening" was coined by the Ethereum community in 2017. Flippening describes the hypothetical event where Ethereum's market capitalisation surpasses that of Bitcoin. Currently, Ethereum is in second place in terms of market capitalisation.
The assumption that Ethereum would surpass Bitcoin in market capitalisation is based on the idea that Ethereum is more diverse than Bitcoin and is designed for decentralised applications through the use of smart contracts. In addition, the influx of liquidity in recent years has led to a significant increase in the price of Ethereum, instilling confidence among Ethereum supporters in the potential occurrence of the "flippening". However, this event has not yet occurred.
Flippening Mechanisms
Ethereum was designed to enable a variety of online transaction options, such as conducting transactions between parties, signing smart contracts and initiating decentralised financial applications. Due to its versatile utility, the Ethereum blockchain has been nicknamed "digital oil". These characteristics could encourage more people to invest in Ethereum, ultimately increasing its market value.
Other scenarios that could lead to a flippening include a significant percentage drop in the value of Bitcoin while Ethereum remains stable, or if the value of Ethereum rises relative to Bitcoin. A flippening is also possible for other metrics such as transaction volume, active wallets, Google Analytics and so on. In essence, Bitcoin currently dominates the market in terms of market capitalisation. However, in 2021, Ethereum will overtake Bitcoin in terms of transaction volume.
Is the Flippening likely to happen?
If Ethereum's growth continues, we may see a flippening soon. However, keep in mind that the flippening doesn't guarantee an increase in Ethereum's price. This market flipping could also happen if the Bitcoin market collapses. Basically, it's wise to be cautious here, as a potential flippening does not make Ethereum a good investment.
