The fight for the most prominent crypto market cap has been between the same two coins for quite some time. That being Bitcoin and Ethereum. If you look back over the last year and beyond, you will find a lot of discussions about if or when ETH could dethrone BTC. Many think it’s inevitable, but much of the debate has started again. So, let’s dive into what “the flippening” is and how it could be different this time.
“Flippening” is a general term used to describe an asset overtaking the market cap of another. Though with crypto, its reference is to the battle between Ethereum overtaking Bitcoin.
This discussion isn’t new but has recently resurfaced as Ethereum continues to upgrade and moves toward its merge.
At the time of writing, ETH’s market cap makes up 17.9 % of the total crypto market versus BTC’s 41.6 %. So, combining the two, you have over half of all the crypto market cap right there at 59.5 %.
BTC/ETH a Quick Comparison
You could start by saying that it’s like comparing apples and oranges. Is one inherently “better” than the other? It depends on what you aim to accomplish with the use case. For example, critical factors in the battle for market cap dominance between BTC and ETH are network adoption, speed/security, and use case.
BTC was the original that started it all. It’s the first cryptocurrency that happens to be trusted by governments, companies, and individuals alike. It has comparisons to digital gold, a hedge against inflation, and a hedge against policy. That is quite the list of attributes.
Ethereum is similar in a sense, but there are key differences. Ethereum allows decentralized applications to be created/run and gives a fuller use for Blockchain technology other than money. ETH has more specific use cases than BTC. And with that, a more critical purpose when storing computer code and solving unique problems. Ethereum is kind of like the oil to the gears.
ETH 2.0 Merge
The Ethereum Merge will be the most significant upgrade ETH has ever undergone. This upgrade will make Ethereum more effective with improvements to speed and scalability. In addition, it has had much to do with the flippening debate catching steam again. The merge will effectively create Ethereum 2.0, essentially a fork of Ethereum just like Ethereum Classic.
This merge is where the Proof of Stake Beacon Chain, “the consensus layer,” launched on December 1st, 2020, will meld with ETHs Mainnet, being Proof of Work, “mining.”
One of the more significant changes is being able to secure the network by natively staking ETH while earning yield. This merger will lead to ETH becoming deflationary, significantly more energy efficient, and bodes well for the price of ETH long-term.
With plans for the Goerli testnet set to merge between August 6th – August 12th, it is the last step needed until the ETH 2.0 merge is complete. Later this summer, we could see things get exciting, which some say it already has. One of ETH’s lead developers had mentioned September 19th as the most recent date for merge completion.
It’s worth noting that when combining layer 2 solutions, ETH 2.0 will be possible to reach the touted 100,000 transactions per second when sharding integrates.
We are looking at 2023-2024 as a timeframe for that. There can be a lot of trading happening around merge/upgrade dates with speculation about specific metrics and whether they have already been priced in or not.
If network demand stays the same for ETH, which demand will most likely increase from current levels, this will result in some positive price action. If you want to see what it might look like when this merge happens and send ETH into orbit, check out ultrasound.money.
On their site, you can simulate the ETH merge and compare what the burn, supply growth, and issuance could look like before and after implementation. Though not every aspect will be available immediately, Vitalik stated on Twitter, “Merge + surge + verge + purge + surge are not staged!” “They are all happening in parallel.” So many great things to come but defying inflation; now that’s a show to watch.