The rising altcoin season has made ETH hit record highs and dropped Bitcoin’s market dominance to 50%. The blockchain community seems to believe this as a good thing since it allows the rest of the market to grow. However, is that really the case?
Several experts argue that a potential “flippening” is not only a horrible thing but it could spell disaster for the crypto market. Let’s analyze.
Ethereum’s Dominance On The Rise
The crypto market has seen unprecedented growth in decentralized finance (DeFi) and non-fungible tokens (NFTs). Ethereum is gaining prominence and reached a new record of $2,641.09 before it dropped down.
Ethereum (ETH) accounted for nearly 15% of the overall market at its peak on Thursday, with its dominance rising by nearly 4% since the start of 2021. ETH has outperformed BTC quite handsomely over the last week with a 9.5% return. This isn’t just limited to Ethereum of course, cryptocurrencies like Cardano, Polkadot, and Uniswap have also made major inroads into the top 10 due to BTC’s dropping dominance.
Paolo Ardoino, the chief technology officer of Bitfinex, says interest is now expanding beyond Bitcoin and Ether, and that's where the momentum lies. He further stated,
"As the industry continues to mature, we expect more blockchain-based applications to be introduced to the world, and coinciding with that, a surge of interest around other alternative assets... as they become more market ready."
Why Bitcoin’s Ethereum Flipping Could Be Disastrous
Well-known crypto Twitter profile "@loomdart," made an interesting observation that noted the potentially disastrous effects of a BTC-ETH flip. According to them, a project can easily replicate or provide additional value to what Ether currently provides, thus becoming the next "Ethereum killer." Crypto tokens from companies such as Cardano, EOS, NEO, etc., are being touted as the Ethereum killer.
But there's hardly any project that comes close to being a "Bitcoin killer." This is mainly because of Bitcoin's scarcity and for it being the sought-after crypto as well. It does a great job at being the decentralized crypto asset that everybody wants a piece of.
Since Bitcoin's introduction to the market, it has encroached on the market value that gold provides. Gold market cap has seen a decrease that amounts to a larger percentage than Bitcoin's market cap. Therefore, flipping Bitcoin in a rush could be disastrous for the Bitcoin market cap and affect the overall crypto market.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.