What is the Flippening? Will Ethereum Take Bitcoin’s Number One Spot?
Ethereum’s Rally From $10 to $400 in Six Months!
The last six months have been a dream for Ethereum investors and enthusiasts. From a turbulent 2016, Ethereum has entered 2017 bullish and growing from strength to strength.
At the start of the year, the tokens of the innovative application building platform traded for around $10. Today, we see Ethereum being traded for around $377, with a market capital of over $34 billion! In contrast, Bitcoin’s market capital is $42 billion.
This recent surge in capital and trading price could be put down to numerous reasons. There’s the newly formed Enterprise Ethereum Alliance, ICOs, new capital from investors both corporate and private alike, growing media attention, and the possibility of Ethereum overtaking Bitcoin, which many have dubbed “The Flippening.”
The Flippening
As the community watches with curiosity and excitement, many have titled this historic event as “The Flippening,” the moment where Ethereum surpasses Bitcoin in market capital and becomes the number one cryptocurrency.
Ethereum’s true purpose enables it to become an application builder. Developers and users alike can benefit from Ethereum and literally create any type of program using Smart Contracts. The ETH token we see gaining so much in price is just one of the many use cases for Ethereum.
Many new blockchain-based start-ups use Ethereum’s Smart Contracts to build applications with. They launch an ICO, which is similar to fundraising or crowdfunding, and then they release tokens back to the investors.
Because of its seemingly limitless potential, many have said “The Flippening” was inevitable and it was only a matter of time before Bitcoin becomes the next Myspace. However, the process of Ethereum surpassing Bitcoin may not be so easily achieved. Despite the gap thinning between the two cryptocurrencies, Bitcoin’s market capital is still growing, along with its price, which reached the $3,000 region for the first time last week.
We could see several “Flippenings” between the two cryptos over the next few months as they battle for the sought-after number one spot. It may not be as easy as many think to overtake Bitcoin!
ICOs Boosting Ethereum
There are several variables that could be looked at as the reason behind Ethereum’s steep surge. One of these is the popular ICO phenomenon, which has now become the normal way for new blockchain start-ups to raise capital for projects. As the majority of these ICOs are now using Ethereum’s Smart Contracts to build applications, it has directly influenced Ethereum’s price and market capital.
As new capital pours into the Ethereum economy, the price and market capital surges. On the days of new ICOs launching, the Ethereum price rises, something that seems to have no end in sight as more teams of developers seek to start innovative new projects.
Bitcoin Hasn’t Slowed Down, But it is Holding Itself Back!
If Bitcoin had SegWit, it would be worth more. Everyone can agree with this, as SegWit activating on Litecoin injected much needed life into the old altcoin.
With the uncertainty looming around Bitcoin, many of the altcoins (including Ethereum) have been used as a hedge against any worst-case scenarios in the Bitcoin community, such as a hard fork splitting the economy into two.
Despite this, Bitcoin’s growth, which may not be as dramatic as other alternative coins, has given investors huge returns, making traditional savings accounts look meager. This time last year, Bitcoin traded in the $700 region.