Just before you think I am blabbering in my sleep, these are two actual terms coined in the Cryptoverse to present two possible scenarios, but on two different sets of digital coins. Back in February, I wrote about Flippening – this was the time when the Cryptocurrencies current & ongoing price decline had just started, after the price peak reached in December 2017. The Alt.coins still commanded more than 50% of the market share with Ethereum posing a serious threat to the supremacy of the Crypto kingpin Bitcoin (BTC). A lot has happened since then & Flippening actually did happen but not between Bitcoin & Ethereum. Let’s explain Flippening to people who don’t know what the term means before moving on to the rest of the story.
Flippening refers to a possible future event when Bitcoin is replaced from the top spot of the Crypto world by some Alt.coin — which in this case was touted to be Ethereum with a website dedicated to this possible scenario called Flippening Watch. This was the time when Bitcoin was still much more energy intensive to mine, had high transactions costs & processing time was really slow, while Ethereum was the star of the Crypto block with an ICO platform which provided the launching pad for other coins apart from being more scalable than Bitcoin. What happened during the course of the year is history as the Cryptos’ price continued to plunge, Bitcoin got some major upgrades in the form of Lightning network etc., Ripple (3rd largest coin by market cap) got widespread adoption in the form of cross border transaction token, Ethereum got some major competitors in the form of EOS, WAVES, Stellar, NEO & NEM as its upcoming Casper upgrade kept getting pushed back (now slated to release in Jan. 2019). As the prices for the digital coins dwindled, so did the hopes of Ethereum flippening Bitcoin as evident from chart below.
When I posted the chart in my previous article, the ETH/BTC ratio was over 60% back in February & Ethereum was positioned as the top contender among the Alt. coins to overtake Bitcoin’s supremacy. The Crypto bulls saw in dismay with the tables turning on the broader digital assets’ market during the year. The major resulting factor from this Bearish run was the climb of BTC’s dominance from the historic lows of 38% earlier in the year to the current 55%. As the market cap for the broader Crypto market cap shrank drastically so did the share of Alt. coins as the ETH/BTC falling to about 16% at the time of writing. This has clearly dashed hopes of ETH flippening BTC anytime soon that is if the Cryptucrreuncies do end up surviving the current ‘death trap.’ Having said that though, a Flippening did take place with Ripple toppling over Ethereum over as the second biggest digital asset by market cap.
The Market share chart (above) shows a couple of unsuccessful attempts by Ripple to grab the second spot before finally ‘flippening’ Ethereum over. The chart also signifies that Bitcoin is the only digital currency with some kind of consistency in the market share hovering around 50% with a bull run reducing the market share while a downturn increasing the same. There is one anomaly of about 90% market share at the beginning of the chart which is the time period when there were very few Alt. coins existing thus the lion’s share of the market share went to Bitcoin. The other two digital coins on the chart are Bitcoin Cash & Ripple – the former has recently undergone a hard fork thus the sharp drop in market share. This also brings us to Flappening.
While both Bitcoin Cash (BCH) & Litecoin (LTC) are considered the successors of Bitcoin in one way or the other with both of them created to address the shortcomings of the original coin like faster processing & low transaction fees which would make retail adoption easier. However, LTC was created in 2011, way before BCH (2017) – but the latter had the Bitcoin brand name backing it which got it priced higher while gaining a bigger market cap than Litecoin as well. Litecoin proponents have long argued over the advantages of LTC over BCH & awaited for Flappening to happen – combining Flippening with Litecoin creator Tommy Lee’s nickname ‘Chikun’.
With the two biggest metrics measuring the strength of a digital coin being the price & its market cap LTC lagged behind its counterpart till the BCH split that happened last month. The resulting ‘hash war‘ not only dragged the fortunes of an already struggling market but cut in half the market cap of the original coin BCH into BCH ABC (Bitcoin Cash Adjustable Blocksize Cap) & BCH SV (Bitcoin Cash Satoshi Vision) resulting in the displacement of BCH & BCH SV to lower positions than LTC by market cap as you can see in the figure above. The Flappening has also seen a price hike for LTC by more than 10% in the past couple of days alone. It will be interesting to see whether Litecoin is able to hold on its edge in the long term.
The Crypto market has seen a lot of twists & turns in 2018 as the year winds down. We might as well see other instances of Flippening taking place as the market comes of age & we see more viable projects trickling through. For now, all eyes are at the continued price squeeze as traders lose hope of a bull run.