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Highlights
- Bitcoin is valued at US$920 billion – almost three times that of Ethereum.
- Bitcoin represents 41% of the total market cap of all cryptocurrencies put together
- The possible event of Bitcoin taking over Ethereum in market cap is called as flippening.
Bitcoin, the world’s largest cryptocurrency has maintained its dominance for long. Such is the domination, that in layman’s parlance, Bitcoin can be looked upon as the new Xerox.
Xerox Holdings Corp (NYSE:XRX) – an American corporation that sells print and digital document products – came up with its iconic photostat machine. With time, the words photostat and Xerox started being used interchangeably. It is a classic case where a brand became bigger than the product itself.
So is the case with Bitcoin. For many, they use it interchangeably with cryptocurrency itself. At its peak, the market capitalisation of Bitcoin stood at a whopping US$1.18 trillion in mid of April 2021 – much in league with the big tech companies based out of Silicon Valley.
However, when bears gripped the market, Bitcoin’s market cap tumbled to US$578 billion by 19 July 2021. Right now, as digital currencies are witnessing buying yet again, Bitcoin is valued at US$920 billion. While the asset prices may have fluctuated, one thing has remained constant: the domination of Bitcoin.
Even as Bitcoin continues to dominate, its stronghold has begun to falter.
Bitcoin has held the top spot among digital assets without any serious competition since its creation in 2009. On 24 February 2017, Bitcoin’s market cap accounted for 86.74% of the total market cap of all cryptocurrencies. After that, even as the prices of Bitcoin have risen, its market share has fallen steeply as more and more coins are getting launched and picking up really well. Right now, Bitcoin’s market cap only makes up 41% of total market cap of all cryptocurrencies. This is probably because other cryptocurrencies have appreciated at a way faster rate than Bitcoin.
Bitcoin versus Ethereum?
There is always a certain degree of comparison between the number one and number two. So is the case with Bitcoin and Ethereum – the world’s second largest digital currency. In terms of market cap, Ethereum is valued at US$379 billion – almost one-third of Bitcoin. In terms of volumes – the measure of how much of a cryptocurrency was traded in the last 24 hours – it’s a neck-and-neck game. Somedays, Bitcoin takes the top prize, and some other days it’s Ethereum. In terms of circulating supply – the number of coins that are circulating in the market and are in public hands – Ethereum is way ahead of Bitcoin. The circulating supply of Ethereum stands 117 million coins – almost 10x of 18.8 million coins of Bitcoin.
So, will Ethereum dislodge Bitcoin?
Well, this thought has been going on for too long. This hypothetical event has a lot of followers and has a proper website dedicated to itself. In fact, in a May 2021 report, Goldman Sachs (NYSE:GS) said that Ether "currently looks like the cryptocurrency with the highest real use potential as Ethereum, the platform on which it is the native digital currency, is the most popular development platform for smart contract applications.” Digital currency enthusiasts call such a hypothetical event as flippening – a possible future event when Ethereum will overtake Bitcoin to become the most valuable cryptocurrency in terms of market capitalisation. But to realise its possibility we need to know of Yahoo story.
In the early ages of the internet, Yahoo was the dominant website and search engine. It had more than triple the traffic of its main competitor, Excite. However, as time progressed, Yahoo was overtaken by other search engines and websites and slowly lost its market share.
