What Is the Flippening?

Satoshi Nakamoto introduced Bitcoin, the first ever cryptocurrency, in 2009 – right after the financial crisis. Bitcoin introduced a new approach to financial transactions, opening the doors to further research and innovation. It has been the largest and most popular cryptocurrency ever since, though that may not always be the case.

Bitcoin facilitates peer-to-peer transactions, a trusted method for transferring and receiving digital currency (such as Bitcoin) without relying on banks or any third parties. Other projects have since improved on the model in various ways, building out numerous use cases.

Because of these innovations, more people use Bitcoin and other cryptos than ever. Some experts even expect Bitcoin to eventually fall by the wayside, overtaken by Ethereum, the second-largest cryptocurrency. This theorized phenomenon has been dubbed the “flippening.”

So, will the flippening occur soon (or ever)? Why might the flippening happen, and why does it matter? Let’s find out.

The Flippening Explained

The term “flippening” was first coined in 2017 when Ethereum gained recognition for its ability to support decentralized applications and smart contracts. Crypto experts argued that Ethereum could simply do infinitely more things than Bitcoin, all while having a sufficiently secure and decentralized infrastructure behind it.

Even though the flippening hasn’t happened yet, and ETH’s market capitalization has since fallen relative to BTC, there’s still a possibility it may occur eventually. Today, Ethereum has advanced further, surpassing Bitcoin in several key areas, including transaction costs, trading volume, sheer utility, and network usage. Consequently, certain crypto investors, traders, and users anticipate the flippening in the near future.

While Bitcoin still has the upper hand, this hypothetical event can be concerning to some people, as it may change the crypto world and how people perceive cryptocurrencies.

How Would the Flippening Work?

Market capitalization or market cap is a key term for understanding the flippening event. Market capitalization (market cap) refers to the total value of circulating cryptocurrencies (coins or tokens) that are available to use. The flippening would occur when Ethereum’s market cap, not its price, exceeds Bitcoin’s. No one is expecting ETH to break $100k+ anytime soon.

Here’s how to calculate market cap:

Market Cap = Current Price of the Cryptocurrency X Total Circulating Supply

Let’s say the price of one bitcoin is $30,000, with a circulating supply of 19 million. Thus Bitcoin’s Market Cap = 30,000 × 19,000,000 = $570 billion. Similarly, if Ethereum trades at $3,200 with 120 million ETH in circulation, its market cap would be around $384 billion

Market cap allows investors to compare various coins or tokens, and it is often used as a stand-in for valuation (though it’s far from perfect in that regard). Coins with a higher market cap are typically more stable and less volatile, while coins with lower market caps often have greater profit potential and more risk.

How Market Cap Influences the Flippening

Price is one of the two key factors that determine market cap. If Ether’s (Ethereum’s native cryptocurrency) price increases at a faster rate than Bitcoin’s for long enough, the flippening may occur. The declining prices of both currencies can also lead to the flippening over time if Ethereum’s price decline is slower than Bitcoin’s. However, since Bitcoin often holds up somewhat better than Ethereum during downturns, experts suggest that the flippening is more likely to happen in a bull market.

The second key factor of market cap is the total number of circulating coins. Since Ethereum does not have a predetermined maximum supply, its supply model is flexible, and the total supply limit of ETH is not fixed in the protocol. In fact, it recently added a deflationary mechanism that burns ETH when network usage is high, helping to reduce its supply over time.

In contrast, Bitcoin has a fixed cap, with only 21 million coins that can be mined. Almost 19.1 million Bitcoins have been mined, and it is expected that the remaining coins will be mined by 2140.

This supply restriction helps increase the total value of Bitcoin by introducing scarcity. On the other hand, Ethereum’s flexibility could reduce its value over time if network usage isn’t high enough to deflate the supply. However, if Ethereum’s usage remains high for a long period of time, its supply could shrink significantly, helping to push its value up.

Ethereum’s Proof-of-Stake (PoS) consensus mechanism could be another boon for the coin, as it incentivizes investors to lock up their ETH to earn passive income, effectively removing them from the circulating supply (at least in the short term).

The increasing value of Bitcoin prevents the flippening. However, if Ethereum’s price rises faster than Bitcoin’s, it could lead to the flippening.

The Current Market Gap

As of today, Bitcoin’s market capitalization is around $2.1 trillion, and Ethereum’s is around $300 billion, according to CoinMarketCap. You can see that Bitcoin still dominates Ethereum in terms of market cap.

ETH/BTC price chart | Source: TradingView

Historically, Ethereum came closest to a flippening event in 2017 and 2021.

Ether’s market cap increased to about 55-60% of Bitcoin’s in June 2017 during the ICO boom
Ether’s market cap increased to 50% of Bitcoin’s in May 2021
Ether’s market cap reached 53% of Bitcoin’s in November 2021

Why the Flippening Matters

The flippening would be a ground-breaking event that could cause tremors throughout the crypto world. Bitcoin has long been seen as the king of crypto. Ethereum’s revolution deposing BTC would prove that the crypto community’s priorities and goals are changing.

The flippening would have all sorts of other significant consequences felt across the market. As the market leader, Bitcoin’s price and reputation tend to influence the prices of other cryptocurrencies. The flippening might change the situation, making altcoins dependent on Ether instead of BTC (or both). Another possibility is that altcoin price movements become independent of both cryptos.

The flippening would undoubtedly bring a massive change to the cryptocurrency industry. Institutional and development priorities might shift further towards Ethereum. However, this doesn’t mean it would be the end for Bitcoin. Instead, it could signal that the market is shifting from brand loyalty to innovation.

Arguments For the Flippening

Why do some think the flippening may be possible or even desirable? Let’s see some arguments supporting the possibility of a flippening event.

1. Growing Utility of Ethereum

Ethereum is often referred to as the foundation of decentralized utility, supporting various innovative technologies, including smart contracts, decentralized autonomous organizations (DAOs), and non-fungible tokens (NFTs). Bitcoin, on the other hand, offers less utility, higher fees, and slower transactions.

With the growing popularity of decentralized finance (DeFi), Ethereum has become more important as a foundation for dApps and other DeFi protocols. NFTs are also gaining popularity among the community, ultimately increasing Ethereum’s utility.

2. Emergence of Proof-of-Stake

Ethereum’s Proof-of-Stake (PoS) mechanism enables validators to participate in block validation by staking their Ethereum (ETH). Unlike Proof-of-Work, this is an energy-efficient method where validators are randomly selected to validate transactions.

Not everyone can become a validator in Ethereum’s PoS system, as it requires staking a minimum amount of 32 ETH. However, investors can pool their ETH with other investors to reach the 32 ETH minimum through various staking platforms. Although Ethereum does not have a hard supply cap like Bitcoin, the Proof-of-Stake mechanism allows it to limit and even shrink its supply. This reduced supply creates scarcity and increases Ether’s utility, which could help lead to the flippening.

3. Increasing Transactions Using Ethereum

Over the next decade, cryptocurrency adoption is expected to grow more and more as utility is built out. Bitpanda predicts that Ethereum’s demand will rise in the future due to its role in DeFi, smart contracts, and NFTs. Investments from major companies and financial institutions might also increase Ethereum’s demand and utility.

4. Ethereum Dominates in Terms of Developers

Ethereum is built upon a programmable blockchain where developers build decentralized applications. Ethereum’s versatility and broad range of use cases encourage more developers to use the platform. As more decentralized apps and games are built on the platform, demand and value continue to rise. At the time of writing, Ethereum has many more developers working on it than Bitcoin (and other chains).

5. Institutional Adoption of Ethereum

In 2024, the US Securities and Exchange Commission (SEC) approved ETH exchange-traded funds (ETFs) which was a significant achievement for Ethereum. The ETFs are already encouraging more institutional investors to invest in Ethereum, potentially increasing demand and adoption in the US.

Arguments Against the Flippening

While there are plenty of reasons to believe that Ethereum may eventually overtake Bitcoin, the coin also has a few major headwinds to fight through. Here are some of the most important issues to watch.

1. Bitcoin’s First-Mover Advantage

Bitcoin has the advantage of being the first cryptocurrency to gain widespread recognition. Bitcoin is the digital gold that has established itself as the store of value in the crypto world. Ethereum, on the other hand, is an evolving technology that hasn’t yet proved itself in the minds of many risk-tolerant and careful investors.

Since Bitcoin as an asset is more mature and popular, most institutional investors, corporate treasuries, traditional finance, and regulators prefer it.

2. Bitcoin’s Simplicity and Security

Ethereum is more flexible than Bitcoin, but it also means the utility on Ethereum is more vulnerable to bugs, hacking, and network congestion. Ethereum has more features and is more advanced, which also makes it more complex.

However, Bitcoin focuses more on security and immutability. Therefore, it presents a simpler approach, offering a stable and trusted platform to all.

3. Bitcoin’s Gold Standard Perception

Market sentiments and narratives are powerful and hard to change. The cryptocurrency world recognizes Bitcoin as the gold standard of digital currencies. While Ethereum is more advanced, Bitcoin surpasses it in terms of popularity and reputation.

What Would Happen If the Flippening Occurred?

The flippening would certainly change the crypto world. Here are some possible impacts:

The Market Will Shift

Currently, the market sentiment favors Bitcoin. However, if Ethereum surpasses Bitcoin, the market could shift towards it in a major way. Individuals and institutions might find more confidence in the rising currency, pushing its value up even more.

Investor Sentiment Will Change

Investors may rethink their strategies and adjust their portfolios based on the flippening event. The flippening might be an indication to investors that Ethereum has a rising potential. So, they might choose to invest more in Ethereum. Some may also choose to sell their Ethereum holdings to secure profits.

Ethereum Will Get More Media Coverage

The moment Ethereum achieves the flippening, it will become a global sensation with plenty of media attention. News publications and crypto influencers will spread the news, influencing public sentiment and interest. This could help Ethereum gain as strong of a reputation as Bitcoin has now.

Competition Will Grow

The flippening could change the landscape of the industry by forcing similar technologies to become better and stay relevant in the market. Other platforms might strive to become more innovative, and new inventions may attract more users to the crypto market.

The flippening might raise not only Ethereum’s popularity but also the popularity of cryptocurrencies as a whole.

Key Indicators to Watch for the Flippening

Some key indicators investors use to track the possible flippening:

Market cap ratio – The ratio of Ethereum’s market capitalization to Bitcoin’s. An increasing ratio indicates a flippening event.
Transactions – Increasing transactions indicate rising adoption and popularity.
Active addresses – Like transactions, more active addresses on a particular platform indicate higher user engagement.
Developer commits – A higher number of commits indicates the future potential of innovations.

Increasing transactions, active addresses, and developer commits are all signs that Ethereum has the potential to flip BTC. If these trends continue or even increase, the Flippening could occur faster than you might expect.

Will the Flippening Actually Happen?

No one can guarantee whether the flippening will ever happen. And even if it does, there’s no telling when. It’s an ongoing debate that depends on many key factors. Even key indicators like transactions or market cap trends cannot predict that a flippening event is approaching with any certainty.

Whether the flippening will occur or not will depend on market trends and price movements of Ethereum and Bitcoin. Since the crypto market is volatile, predicting price movements of currencies is difficult.

The current market cap difference reveals a major gap, with Bitcoin dominating. Unless a substantial event arises, the flippening is unlikely to occur soon.

The Flippening – Our Verdict

The flippening will be a industry-changing event if it ever occurs and all crypto investors should be watching the situation closely. However, some of the claims about the potential effects of the flippening are likely exaggerated.

A flippening event won’t mean that Bitcoin is becoming worthless or anything of the sort. If it happens, investors should consider factors like how the flippening occurred, current trends of currencies, and their potential before making significant investment decisions.

FAQs

What is the meaning of the flippening?

The word 'flippening' originates from the term 'flip', which refers to Ethereum's potential to overtake Bitcoin.

Which crypto can beat Bitcoin?

After Bitcoin, Ethereum is the second-largest cryptocurrency and the most likely candidate to potentially surpass Bitcoin in market cap.

How stable is Bitcoin?

Although Bitcoin prices are volatile, the fixed supply of Bitcoins makes it much more stable than other coins. The prices still depend on factors such as supply and demand, investors' perceptions, news, and regulatory actions.

Could Bitcoin go to zero?

It's nearly impossible for Bitcoin's price to go to zero because of its established user base and limited supply. However, prices may fluctuate significantly.

Is investing in Bitcoin still risky?

Yes, unlike regulated financial markets, cryptocurrency exchanges and platforms are unregulated and lack investor protection. There is a possibility of fraud, mismanagement, and even sudden collapses.

Is ETH losing value?

From time to time it loses value but it often gains value as well. As of June 19, 2025, Ethereum (ETH) is not consistently losing value, but it is trading well below its all-time high.