Will Ethereum overtake Bitcoin in market capitalization: what is the flippening?

What is the flippening?

The flippening refers to a hypothetical situation in which the leading altcoin, Ethereum, could surpass the market capitalization of "digital gold," Bitcoin. The term "flippening" comes from the words "flip" (overturn) and "happening" (event) and first appeared in 2017 during the bull run* and the first large-scale cryptocurrency boom, when several altcoins, including Ethereum, outpaced Bitcoin — the leading cryptocurrency— in terms of growth in market capitalization and liquidity.

* Bull run (bull rally) — a period during which the value of digital assets rises rapidly.

It was during that period that Ethereum supporters began to hope that a flippening would occur, making ETH the new leader of the cryptocurrency market.

Market data from 2017 showed that such a flippening scenario was indeed realistic, as Ethereum came very close to Bitcoin in terms of crypto-market dominance. During the bull run, Ethereum's dominance rose to 28%, while Bitcoin's fell to 43%.

As of January 2026, the flippening indicator stands at 20.6%, with the peak value of 85.1% reached in June 2017. Since September 2022, the flippening indicator has declined by more than half.

How realistic is the flippening?

Although Ethereum is still far behind "digital gold" in terms of market capitalization, by several metrics the altcoin has already significantly outperformed the first cryptocurrency, and the development of the decentralized finance (DeFi) market may only widen this gap.

Liquidity in the DeFi market

Ethereum leads the decentralized finance segment. According to DeFi Llama data as of January 2026, Ethereum's total value locked (TVL) exceeds $71 billion. By the same metric— more than 10 times smaller than Ethereum's TVL — Bitcoin ranks only third in the DeFi segment.

User activity

Ethereum also surpasses Bitcoin in the number of daily active users. As of January 2026, Ethereum had 765,000 daily active users, compared with 463,000 for Bitcoin. In addition, Ethereum ranks among the top 10 blockchains by network activity.

Is a flippening possible in the near future?

Among crypto experts, opinions on the possibility of a flippening are divided: some suggest that Ethereum or a similar blockchain could surpass Bitcoin in market capitalization by 2035, while others estimate the probability at only 5%.

According to the monitoring service CoinMarketCap as of January 2026, Ethereum's market capitalization is nearly five times smaller than Bitcoin's — $373 billion versus $1.8 trillion.

To overtake Bitcoin by market capitalization, the price of Ethereum would need to rise by 400% and exceed $15,000, assuming Bitcoin's price remains at the same level. Ethereum's all-time high (ATH), however, has so far been reached only at $4,953 in August 2025. Some experts had forecast Ethereum's rise to $14,000 by the end of 2025, but this did not happen — nor did the flippening.

At the same time, Bitcoin's dominance over the same period stands at 58%, while Ethereum's is only slightly above 12%, although it has increased 1.5 times since 2019. In 2017, the gap between BTC and ETH dominance was only about 35%, whereas it currently exceeds 79%.

Arguments in favor of the flippening

Supporters of the flippening point to the shrinking supply of ETH made possible after the activation of the Merge upgrade in 2022. After Ethereum transitioned to the Proof-of-Stake (PoS) consensus mechanism, the issuance (minting) rate of new ETH coins fell by more than 90%. However, unlike Bitcoin, Ethereum does not have a capped maximum supply, which makes the leading altcoin an inflationary cryptocurrency.

An additional factor for a potential flippening may be the amount of locked assets. The Bitcoin blockchain does not provide for locking BTC in a way that would temporarily remove coins from circulation, as it uses a different consensus mechanism based on mining.

Ethereum, on the other hand, uses the PoS consensus mechanism based on staking, which requires locking a certain amount of ETH for a period of time, thereby reducing the circulating supply of ETH on the market. According to Dune Analytics as of January 2026, nearly 28% of ETH — worth about $100 billion, or more than a quarter of Ethereum's total supply — is locked in staking.

Another argument in favor of the flippening is Ethereum's technological development and the many use cases for the ETH cryptocurrency. Ethereum is often called "digital oil" because it serves as "fuel" for transactions across hundreds of decentralized applications (dApps) in the DeFi space.

In addition to paying gas fees for transactions, ETH is used as collateral in lending protocols and to provide liquidity on decentralized exchanges. These factors could increase the likelihood of a flippening in the future, provided that Web3 infrastructure continues to develop.

Arguments against the flippening

Opponents of the flippening note that Bitcoin is a more stable and in-demand asset among institutional investors. Moreover, Bitcoin is more straightforward, which facilitates its mass adoption.

In addition, experts note that the Bitcoin ecosystem is evolving through second-layer solutions such as the Lightning Network (LN) and the Liquid Network. DeFi protocols have also been developed, such as Babylon Protocol for Bitcoin restaking*.

* Restaking — a mechanism in which already staked crypto assets are reused to provide security, validate transactions, or operate additional protocols and networks. This approach allows participants to earn extra income without withdrawing assets from the primary staking.

The emergence of new protocols significantly expands the use cases for the BTC cryptocurrency, thereby reducing the likelihood of a flippening. According to experts, Ethereum would need a genuine technological breakthrough for a flippening to occur.

Analysts also do not rule out a psychological factor preventing a flippening, as Bitcoin is firmly established in the market and is the most recognizable cryptocurrency. This is why, as a rule, BTC tends to rise first, followed by altcoins.

According to forecasts by Standard Chartered analysts, Ethereum's price could reach $8,000 by the end of 2026. The same Standard Chartered forecasts Bitcoin's price at $150,000 by that time. Under such a scenario, a flippening would not occur unless ETH's supply were significantly increased.

Other analysts believe that in the long term, Ethereum's price could reach $20,000. In that scenario, a flippening could occur only if Bitcoin's price rises only slightly relative to current levels.