What is Flippening? Definition & Meaning Crypto Wiki

Now is a good time to explain the flippening and how it can affect bitcoin’s position as the top cryptocurrency in the next few years. Ethereum is largely inspired by Bitcoin, and is currently the second most valuable cryptocurrency with a market capitalization over $216B. The total value locked in DeFi smart contracts has grown from around $1B in June 2020, to around $50B a year later. Unlike in traditional organizations, the bylaws of a DAO are hard-coded in smart contracts and is absolute law. Members’ votes are tallied, and changes are implemented automatically without the need for an intermediary.

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Instead, a more competitive cryptocurrency ecosystem will be created, and altcoins are expected to significantly rise in value over the next few months and years. Ethereum, Monero, Dash, Factom, and others are all trying to find their place in the world right now. Nearly all of these currencies have risen in value despite bitcoin’s price either stagnating or going down. While it is possible this is just a temporary change, the flippening is not a trend that should be ignored by any means. “Due to its recent upgrade, the number of new No. 2 coins as a percent of current coins is likely to dip below that of bitcoin, with the potential of going negative,” said McGlone in a September research note.

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The protocol facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain through the use of smart contracts. In recent months the term has also been used in reference to different cryptocurrencies. Recently, Twitter users have been using it to describe shiba inu surpassing dogecoin as the largest joke cryptocurrency by market capitalization. Before we dive into the Flippening, it’s essential to understand the concept of market capitalization. Market cap is a measure of a company’s or asset’s value, calculated by multiplying the price of a single unit by the total number of units outstanding.

The Flippening is the hypothetical moment when Ethereum’s market cap surpasses that of Bitcoin. This would mean that ETH becomes the largest cryptocurrency by market capitalization, overtaking BTC. list of 18 gkfx prime employees Market cap is an essential metric for investors and analysts because it gives them a sense of the size and value of a company or asset. In the case of cryptocurrencies, the market cap can also be a good indicator of adoption and demand. Generally, the higher the market cap, the more people are interested in a particular cryptocurrency and the more valuable it is perceived to be.

As a result of this paradigm shift known as the flippening, it is very well possible bitcoin may not be the dominant cryptocurrency in the future. Or to be more precise, it may not hold such a big lead over other cryptocurrencies moving forward. Bitcoin’s share of the total cryptocurrency market cap continues to dwindle, allowing altcoins to rise in value, regardless of what is broker vs realtor vs. real estate agent happening to the bitcoin price. Until a year or two ago, such a change seemed impossible, yet the charts speak for themselves. Market cap is a simple metric, but a lot of factors will need to come together to make the flippening happen.

One could argue there was an air of disdain between most pro-bitcoiners and those whose see the merit of alternative cryptocurrencies. Multiple years of friction have caused strategies for intraday trading fibonacci retracements a paradigm shift in the cryptocurrency world, an effect known as the flippening. To be more specific, it is evident most altcoin traders no longer base individual coins’ value on the bitcoin price. That being said, things are changing in the world of bitcoin and cryptocurrency.

Its limited supply, in addition to its simplicity and acceptance makes it increasingly attractive to institutional investors. The DeFi movement has the potential to transform the world as it offers alternative financial solutions on a global scale, and allows users to do more with their tokens than simply as a store of value. 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.

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We notice the exclusion of middlemen and intermediaries is a running theme when it comes to the blockchain. This was right after the 2008 global financial crisis that came about as a result of excessive risk-taking by the banking institutions entrusted with safeguarding funds. The result of this was fortunes lost and lives ruined with very little repercussion for the perpetrators. 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. “The term ‘flippening’ began appearing in social media such as Twitter and Reddit in February 2017,” said EQONEX’s Ting.

It could drive more investors to spend time understanding ethereum’s real-world potential at a quicker pace, Ting said. In the short-term, a multi-chain environment may offer investors more arbitrage opportunities, he added. However, he also noted that this analysis ignores the rise of ethereum challengers and bitcoin as a monetary innovation, which typically has sticky network effects. New bitcoin scaling solutions could also help it to grab some of ethereum’s market share. The flippening is a term used to describe a potential “flip” in the largest cryptocurrency. Specifically, it refers to the possibility of the second-largest cryptocurrency, Ethereum (ETH -6.54%), overtaking Bitcoin.

1. It is often used to refer to the possibility of Ethereum overtaking Bitcoin as the largest cryptocurrency by market cap.
2. One could argue there was an air of disdain between most pro-bitcoiners and those whose see the merit of alternative cryptocurrencies.
3. It is evident Bitcoin will not be suitable for every project one can think of, or at least not in its current state.
4. The flippening is a term used to describe a hypothetical event where one cryptocurrency surpasses another in terms of market capitalization.
5. Today, that percentage has dropped to 45%, while ether has seen its market share rise from 8.5% to nearly 20% now.
6. Bitcoin “maximalists” have held onto their BTC supply in the hopes of everything turning out to be alright.

The price and number of Bitcoin and Ethereum in circulation will ultimately dictate market cap, but supply and demand is the real driver of a blockchain network’s total value. Flippening is a term used in the cryptocurrency world to describe a hypothetical event where the market capitalization of one cryptocurrency surpasses that of another. It is often used to refer to the possibility of Ethereum overtaking Bitcoin as the largest cryptocurrency by market cap. The term “flippening” is derived from the idea that the positions of the two cryptocurrencies would “flip” in terms of market dominance.

The Transaction Count shows the relation of total on-chain transactions on the network (100% means Ethereum has flipped Bitcoin in that metric). The Flippening is crucial because it would represent a significant shift in the cryptocurrency landscape. If ETH overtakes BTC as the largest cryptocurrency, it will signal a change in investor sentiment and adoption patterns. It could also indicate a shift in the overall direction of the cryptocurrency market.

“I didn’t think it was going to happen [in May 2021] and I still don’t think it’s going to happen now,” Alfred said. “There’s no way that ethereum’s price is going to appreciate enough to catch bitcoin.” Insider spoke with crypto experts to help break down the concept of “flippening”. They shared their predictions on when it might happen and the market implications of the event.

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. The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor. Bitcoin was created to bypass the intermediaries and middlemen upon which the world’s financial system had to come rely. Ethereum’s purpose, on the other hand, is to create a network on top of which applications may be built unrestricted to finance.

Its creator, Satoshi Nakamoto (a pseudonym for a person or group of people), released a white paper describing how the digital currency concept would work in 2008 amid the turmoil of the Great Recession. Bitcoin officially launched in January 2009, and it has been the largest cryptocurrency ever since. Aave currently supports over 20 different cryptocurrencies and as of the end of June 2021, has over $16B in total value locked (TVL), a common metric to measure the amount of assets locked in a protocol. Bitcoin’s blockchain is a distributed ledger of transactions bundled into blocks that are chained together chronologically. In the long-term though, most crypto investors don’t see significant market implications from the flippening.

The term “Flippening” refers to the hypothetical moment of Ethereum (ETH) overtaking Bitcoin (BTC) as the biggest cryptocurrency. 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). Altcoins, on the other hand, have always been looked at as “second-rate projects” by bitcoin maximalists.