Following the successful Ethereum merge, those observing the market are wondering if this historic event will lead to the "flippening" — the hypothetical moment when Ether overtakes Bitcoin as the top cryptocurrency.
While the concept isn’t new, it has gained steam since the recent completion of the Ethereum merge.
All of this is happening in the wake of major ups and downs in the cryptocurrency market — massive adoption and mainstream interest has transformed into a significant bear market that's being called a "crypto winter."
With these circ*mstances in mind, the Investing News Network (INN) asked cryptocurrency experts about whether the flippening theory has real substance, as well as how things stand between Bitcoin and Ether following the Ethereum merge.
What is the flippening?
The flippening isn’t a new idea — the term has been around for some time now, and as mentioned it refers to a potential time in the future where Ether overtakes Bitcoin as the leading cryptocurrency in terms of market capitalization and value.
There is even an active index currently tracking the likelihood of the flippening using a variety of metrics.
But the celebrated Ethereum merge, which took place this past September, has generated renewed questions about whether or not the flippening is actually going to happen at some point in the near future.
The merge, which saw the Ethereum blockchain switch from a proof-of-work system to proof-of-stake methodology, has numerous benefits, including a greener path forward for the network.
“I know that a lot of fund managers and investment portfolio managers, one of the things that they are always pressured on is being environmentally conscious,” Gareth Soloway, chief market strategist at InTheMoneyStocks.com, previously told INN ahead of the merge. “That’s going to alleviate that issue.”
If the flippening were to happen, Ethereum could become the dominant face of the cryptocurrency market. But before investors get too ahead of themselves, there needs to be an understanding of whether or not Bitcoin and Ethereum are even competing.
Which is better, Bitcoin or Ether?
While it’s understandable that market participants pit Bitcoin and Ether against each other and are curious to know which coin has the better value, experts agree the whole notion is not so simple.
“In my mind, you know, these things are, they're fundamentally different,” said Dan Hoover, a director at cryptocurrency-focused investment firm Castle Funds. He sees Bitcoin as an investment asset that can act a store of value, whereas Ethereum is a distributed blockchain network that powers not only Ether, but also many other decentralized software systems.
Elliot Johnson, chief investment officer and chief operating officer at Evolve ETFs, told INN he isn’t buying the hype of a flippening scenario because it would mean both coins are reaching unprecedented levels of acceptance.
“I don't pay a huge amount of attention to this notion of a flippening just because I think it's a little bit silly,” he said. “If a flippening were to happen, it would probably happen in a violent bull market where both of them are worth a lot more than they are today.”
Johnson said a flippening would still mean good news for Bitcoin holders, if it were to happen.
“They're different things, they perform different activities within an investor's portfolio … there's no competition between the two of them,” said the executive, who oversees his exchange-traded fund firm's cryptocurrency efforts.
However, Johnson added that he views the market's increasing attention on the Bitcoin and Ether as a good thing since it means getting more investors interested in the market. “People obviously want to invest in the thing that's going to go up and make the best investment decision that they can,” the Evolve ETFs executive told INN.
Investor takeaway
As speculation builds surrounding the potential for Ether to overtake Bitcoin at some point down the line, Johnson told INN the market should welcome the increased attention that this competition is creating.
Time will tell how much ground Ether can gain following its merge.
Is Ethereum a good investment?
Cryptocurrency investments have opened the floodgates to a new demographic of investors and created a new paradigm of digital market opportunities. But these markets have shown themselves to be quite volatile and risky. Each investor is tasked with developing their own risk profile and leverage that against their thesis. One thing is for sure, Ethereum represents a new age of digital ownership and empowering one of the most critical blockchains out there.
Why is crypto crashing?
In 2022 the value of cryptocurrencies have taken real hits from a severe bear market afflicting the sentiment surrounding these digital coins. From market corrections and exterior market forces affecting virtually every single investment avenue this year, cryptocurrencies have faced serious losses during what’s been referred to as one of the biggest crypto winter periods ever.
Will Ethereum recover?
Alongside the crashing sentiment, Ethereum has struggled throughout 2022 alongside its Bitcoin sibling. Financial experts, however, continue pointing to the long-term outlook for these digital assets and how assertive their futures seem at the moment. In the immediate future it’s not easy to project when things will exactly change.
Don't forget to follow us @INN_Technology for real-time updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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