Once upon a time, “Flippening” was a hot topic in the crypto space. This referred to the possibility of Ethereum overtaking Bitcoin as the world’s most valuable cryptocurrency by market capitalization. Recent discussion on this topic has been more subdued. Data from Google Trends on the search term “Flippening” gives a good indication of this.
Price action also points to this. One Ethereum currently equals 0.06 Bitcoin, a significant improvement from 0.09 at the beginning of the year. This is a common occurrence in the crypto markets – Bitcoin has outperformed its smaller counterparts as the market has slowed during the pandemic. However the drop in Ethereum has been more dramatic than the rest.
Bitcoin’s Durability
This is more of a reflection of Bitcoin’s strength than Ethereum’s weakness. Previous periods of market uncertainty saw Bitcoin crashing, dragging the rest of the market down with it. This year, however, has been different – while stock markets have had the worst start to the year since 1939, Bitcoin is only down 16% in USD terms.
This represents significant progress towards the cryptocurrency’s goal of becoming a store of value. While a 16% drop is still not ideal and far from being a store of value, it is a marked improvement from its past performance.
Merger
Despite Ethereum’s financial woes, 2022 looks set to be a defining year for the asset. Flippening has been put on the backburner as the Merge Timeline has been repeatedly pushed back. The highly anticipated switch to Proof-of-Stake, along with other network upgrades such as sharding, is set to increase scalability and address the biggest complaint about Ethereum – the high gas fees.
The outcome of the biggest upgrade in Ethereum’s history will determine the direction the network will take. With the merger now looking imminent (most analysts expect it to happen by the summer), it wouldn’t be surprising to hear the term Flippening being bandied about again.
At the time of writing, Bitcoin has a market capitalization of $742 billion, while Ethereum’s is around $342 billion – a big gap. Flippening is unlikely to happen anytime soon, but the Ethereum vs Bitcoin debate could be revisited after the merger.
