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Can Ethereum ‘Flip’ Bitcoin?

Bitcoin and Ethereum have been battling it out for the title of top cryptocurrency. It seems Bitcoin’s got an iron grip on the belt, but Ethereum has always been a strong, solid contender.

May 2021 saw the biggest opportunity for Ethereum to catch up, closing the gap between the two cryptocurrencies by about $350 billion in value for a while. Bitcoin experienced a whopping 37% price drop while Ethereum only 11%.

All this has got analysts, investors, and crypto experts buzzing. Now that Ethereum’s catching up, is it only a matter of time before it flips Bitcoin? Remember that when analysts talk about filliping, they are specifically discussing market capitalisation. You are unlikely to see your ETH reach $49,000 anytime soon; however as a store of value, Ethereum is looking very good in 2022.

Ethereum: Record-Breaking Numbers

Ethereum’s all-time high this month was recorded at a huge $4891, pushing the cryptocurrency’s market cap to more than $475 billion.

This amount is less than half of Bitcoin’s current market cap—a notable feat, considering Ethereum was worth less than a sixth at the beginning of 2021

According to Bloomberg senior commodity strategist Mike McGlone, both cryptocurrencies have bullish underpinnings. However, the “foundation and use case of [ethereum] is a strong complement to the more macro store-of-value attributes of [bitcoin].”

Turns out, more and more investors are turning to Ethereum investment products, bringing its grand total to $33 million in just one week.

Bitcoin’s Fluctuations versus Ethereum’s Steady Rise

Despite Bitcoin’s (relatively) high value, the cryptocurrency has been fluctuating intensely over the past few months. It has soared to almost four times its worth over the last 12 months, rising to an all-time high of $68,700, and is subsequently holding at around $49,000,

Ethereum, on the other hand, has rocketed an astounding 900% during the same period, effectively closing the gap between the two crypto rivals.

As of June, 2021, analysts placed Bitcoin at 275% growth. Not bad, but definitely not the jump that Ethereum’s had.

What’s more, according to the executive director of cryptocurrency exchange CEX.IO Konstantin Anissimov, Ethereum has “been able to maintain its positive momentum with a crushing series of all-time highs in the past week.”

He goes on to say that Ethereum’s current price hike further serves its ambition of eventually flipping bitcoin by market capitalization in the near future.

Ethereum's Underlying Value

Stability and speed are all hallmarks of the Ethereum finance protocols. Scalability is a problem; Ethereum is struggling to handle more than 15 transactions per second. This increases fees which is a detriment to growth. This is expected to be addressed in an update next year when the system will adopt the proof-of-stake consensus mechanism, speeding up transaction times and reducing fees. This will also reduce the issuance of new ETH coming into the market by a factor of about 10; limiting supply will likely impact the price of the coin.

Ether no longer follows bitcoins price fluctuations as much as it did previously, being driven as it is by its own catalysts. Apart from a store of value, Ethereum has underlying value in its technology. It is most actively used blockchain network - powering many other cryptocurrencies. Ethereum was also the first platform to offer Smart Contract capability; powering decentralised applications and NFTs. There are over 3000 dApps deployed on Ethereum, with the top 10 dApps responsible for around 90% of transaction volumes.

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