Crypto fans are waiting for “flipping”, when the price of Ether will pass Bitcoin
Bitcoin, the world’s largest cryptocurrency, has always ruled the land of digital assets. But now, thanks to an eye-popping rise from Ether, fans of the No. 2 token by market capitalization are reviving predictions that it is one day destined to take over the throne.
In crypto parlance, it’s known as “the flipping” — and it’s still likely a ways off, if it happens. Ether’s market cap of around $210 billion is less than half of Bitcoin’s even after Ether surged 50% in the past month. And yet, the faithful are energized with fresh optimism as a milestone looms that they say will increase the chances of it happening—perhaps sooner rather than later.
“I keep hearing people repeat the question, ‘wen flippen?'” Quantum Economics founder and CEO Mati Greenspan wrote in a note, using the crypto slang used by market believers. “While there is no guarantee that this will ever happen, just looking at the numbers, it seems like this event is getting closer every day.”
Boosters of Ethereum have touted the blockchain as a better version of Bitcoin almost since it was conceived by programmer Vitalik Buterin in 2014 and launched a year later. Bitcoin’s white paper was unveiled in 2008 and credited to Satoshi Nakamoto, the name used by the supposed pseudonymous person or group that developed it.
Ether has rallied in recent weeks as optimism grows over the long-awaited software upgrade, which will ease the transition from the current system of using miners to a more energy-efficient system using coins. The transition to this so-called proof-of-stake system is expected to take place in September after being kicked down the road for several years. Ethereum developers have recently signaled continued progress in testing the new system, and they are holding a series of events for potential players and other community members in the coming weeks.
QCP, a crypto trading shop, said its desk has traded an “incredible amount” of Ether call options in recent days, adding that hedge funds have been big buyers. “We expect this demand to continue as we approach the September merger,” they wrote in a market update on Telegram.
Ether is up about 50% since mid-June, and Ethereum-related assets have also advanced. Uniswap, a decentralized crypto exchange most popular on Ethereum, has jumped about 70% in the past month, data compiled by Bloomberg show. Meanwhile, Bitcoin’s dominance has dropped to around 40% of the market, down from 70% last January, according to CoinMarketCap.
“We like Ether and we think it’s a big differentiator,” said Joe DiPasquale, CEO of BitBull Capital, which manages cryptocurrency hedge funds. “Bitcoin has been the hundred pound gorilla, but Ether is really the other hundred pound gorilla. Everything else follows.” His firm holds Ether and has bought while the coin rose from $1,000 to $1,500. DiPasquale joined his position last week.
The turnaround “is very possible,” said Bodhi Pinkner, an analyst at crypto-asset manager Arca. “We have a favorable view of Ethereum,” he said, adding that, post-merger, it will become a deflationary asset. “So the changing dynamics theoretically bode well for Ethereum’s price relative to Bitcoin, especially in an environment of tightening.”
To be sure, this is not a new development. Crypto masses have long been watching for signs that Bitcoin’s dominance may be waning as other projects and tokens emerge. And while work on the merger has been going on for years, it has been delayed many times. It was last expected to take place in June, but was delayed once again.
“The merger itself is an extremely risky event and a number of things can go wrong,” said Quantum’s Greenspan. “As always in the markets, higher risk can equal higher returns. And they don’t call it risk because it’s airy and safe.”
Henry Elder, head of decentralized finance at Wave Financial, agrees.
“The merger is overhyped from an ETH price perspective,” he said. “It’s an incredibly important technological change for Ethereum, but 99.99% of users won’t experience any difference until months or years later. In the meantime, the impact of reducing and redistributing issuance will take a while to filter down to ETH prices.” »
He points to Bitcoin’s halving process, which is a pre-programmed update that halves Bitcoin rewards for miners every four years or so. The effect of such an event could also take months to see in the market, he said.
“I wouldn’t be surprised to see prices pump into the consolidation, but I don’t think there’s a sustainable catalyst until the second half of 2023,” Elder said.
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