The Price Could Skyrocket  Here’s When Ethereum Could Flip Bitcoin

The bitcoin price’s mammoth 2021 bull run catapulted its market capitalization to over $1.2 trillion last year. It’s since crashed back to a mere $400 billion. Meanwhile, ethereum’s own huge price rally saw it climb to over $500 billion before dropping to just over $200 billion. Now, some traders and investors are predicting the ethereum price will surge following its long-awaited, radical upgrade—potentially making ethereum more valuable than bitcoin for the first time, an event known as “the flippening.”

“Investor interest in ethereum has remained resilient as it nears the merge, its once-in-a-lifetime event that will see the whole network migrate onto proof-of-stake,” Gabriel Selby, lead research analyst at cryptocurrency index provider CF Benchmarks, said via Twitter. “Some have suggested it could be the catalyst for ethereum to overtake bitcoin as the world’s largest coin by market capitalization.”

This week, ethereum is expected to complete its transition from the energy-intensive proof-of-work consensus mechanism used by bitcoin to the more power-efficient proof-of-stake, removing ethereum’s reliance on miners and handing control to those that “stake” their ether on the network. The switch is expected to reduce ethereum’s carbon emissions by 99%, according to the Ethereum Foundation.

Bitcoin’s dominance, a measure of its value compared to other cryptocurrencies, has in recent weeks dipped under 40%, down from a peak of almost 50% earlier this year, according to data from CoinMarketCap. Ethereum has seen its share of the market climb to over 20%, up from lows of under 15%. “Since the start of the year, the market cap ratio between bitcoin and ethereum has converged to its narrowest differential since May 2021.

If the current trend persists, ethereum could reach the top of the league tables by the end of 2023, or sooner,” Selby said. While bitcoin has developed a reputation as digital gold due to its immutability and resistance to both change and censorship, ethereum is designed to be used as the foundation of a decentralized, blockchain-based internet—an idea that’s become known as web3.

“With the proliferation of financial products that have enabled a much broader range of investors to express their price view in the crypto markets—such as the recently launched ethereum options contract by CME—the mechanisms are very much in place for ethereum’s market cap to overtake bitcoin, should there be buy-in from a sufficient number of investors,” Selby added.

Earlier this year, ethereum cofounder and the project’s spiritual leader Vitalik Buterin revealed his plans for ethereum following the “merge” upgrade—with the “surge” next in a series of improvements designed to make the network more secure and decentralized, followed by the verge, purge and splurge upgrades.

“We believe that ethereum has great utility and once the purge phase of pruning the code starts in 2023 it will be a very good blockchain with even greater adoption,” Martin Hiesboeck, head of blockchain and crypto research at crypto trading platform Uphold, said via email, adding: “The [ethereum] price could well skyrocket.”

Over the last year, ethereum has seen a demand boom due to the soaring popularity of non-fungible tokens (NFTs), digital art and media that’s tokenized on the ethereum blockchain. “Ethereum has already surpassed bitcoin in terms of the number of transactions executed,” Daniel Kostecki, a senior financial analyst at the investment company Conotoxia. “However, it is still far behind bitcoin in the volume of transactions on the blockchain or trading on exchanges.”

Kostecki warned it will be “hard to overtake a coin that was first in the world and whose issuance is limited.” Though others are more confident the flippening will eventually happen. “The merge will help global sentiment towards crypto and [the blockchain-based third iteration of the internet] web3 because the second biggest blockchain is becoming greener,” Max Kordek, chief executive of decentralized applications platform Lisk, said in emailed comments. “This is also a necessary step for ethereum to flip bitcoin, which I foresee happening in the next major bull run.”

I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of I reported on..

Source: ‘The Price Could Skyrocket’—Here’s When Ethereum Could Flip Bitcoin

Critics by Stephen Dalton

When the Ethereum (ETH) merge occurs in September, it will mark the end of its PoW system and begin its status as a PoS coin. The Merge will supposedly decrease ETH’s total supply. A decreased supply should help lift the price of ETH. This could assist its rise to #1. However, BTC will always be seen as “digital gold” within the digital universe, while Ethereum is known as “digital oil.”

A rapid increase in the ETH price, a decrease in BTC’s price, or a combination of these two could lead to the Flippening. The ETH merge will not reduce gas fees for transactions (at least not immediately), a primary sticking point that could prevent ETH from growing. By contrast, Solana (SOL) and Cardano (ADA) have cheaper fees due primarily to their PoS consensus mechanism. Could one of them overtake ETH?

Many believe the fees on the Ethereum platform will decline gradually. Instead, the ETH blockchain plans to scale its users’ activity and secure its Mainnet through a decentralized layer. This method could allow for cheaper transactions within the network (eventually). For those unaware, market cap for cryptocurrencies works the same way as that of the stock market.

Replace the word “share” with “coin or token” so that “total shares outstanding multiplied by price per share” becomes total altcoins/tokens outstanding multiplied by the price per altcoin/token equals the assets’ market cap. Market cap is one of the vital indicators of an altcoin’s value. Many newcomers (including me) to the cryptocurrency market considered only an altcoin’s price to determine its value without considering how many are circulating and how many will be produced.

However, scarcity is only one part of the Law of Supply and Demand. Between ETH and BTC, the value or market cap gap is more than $200 billion. BTC’s market cap on 19 AUG is $408,567,909,013, while ETH’s is $206,487,299,810. That’s more than double. However, many are looking at it like the “glass is half-full,” or ETH is almost halfway to the Flippening.

ETH is almost triple its next closest competitor a “stablecoin,” Tether (USDT) valued at $67,554,732,043. In fact, BTC owns more than 55% of the total value within the cryptocurrency industry. These valuations were genuine at the time of my research, though market valuations in the highly volatile cryptocurrency market change rapidly. Conversely, ETH owns just a little more than 12% of the value. This gap may be a hard one to close for ETH.

Plus, other factors may make it challenging for ETH to top BTC in the near future. Let’s explore those so you can form an opinion about the “flippening.” Some “whales” believe ETH has the presence in the crypto universe but not the asset liquidity of BTC, though some Ether watchers and owners would say “…we’re halfway there.” Most crypto enthusiasts understand that the BTC halving creates a bull run.

Well, imagine that times three. The Merge will cut emissions by 90 percent, daily block compensation will diminish from 12800 to 1280 ETH, and inflation will drop from 4.3% to 0.43%, which could be seen as a 3X halving. Many investors do not understand the difference between circulating supply, total supply, and maximum supply. It can be complicated. Of course, circulating supply refers to the number of coins in circulation.

However, total supply doesn’t necessarily refer to the total supply that will ever be produced; that is maximum supply. As opposed to government-produced and regulated fiat currencies, the maximum supply of BTC is set at 21,000,000, which it is predicted to reach by 2040. Yet the price can move quickly due to its small number compared to ETH, which has an announced total/circulating supply of 122,027,066 coins. The maximum supply is not currently known.

Although the number of coins in circulation and price will drive market cap, inflation can stifle growth. Although the Merge will help fight inflation and quell circulating supply, ETH has nearly 100 million coins in circulation than BTC ever will. Regardless of the number of coins in circulation, the demand for either will drive the price. BTC has always led the way, but it has no real project outside of its decentralized nature, limited anonymity, and stored value.

ETH, on the other hand, possesses those qualities; plus, it was created and improved to facilitate many online transactions, such as execute Smart contracts, power Decentralized Applications (DApps) and Decentralized Autonomous Organizations (DAO) that support artists and entrepreneurs to create Non-Fungible Tokens (NFT), and Play-to-Earn (P2E) games.

Those functions often lead to ETH being referred to as “digital oil” because it “greases the skids” for so many operations across the crypto universe. While ETH is set to complete the Merge to PoS in September, many believe it will flip BTC and become number one. However, we must wait and see how the ETH blockchain will function once the Merge is complete.

Suppose, as predicted, the gas fees remain high. What is the advantage beyond the apparent but not visible benefit to the environment? If developers and creators must pay the same high fees, what will stop them from using another platform that performs the same function for less?

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