No Flippening for Ethereum after All, but Price Recovers from Correction

 Earlier in June, the market cap of Ethereum moved closer to that of bitcoin’s. Analysts suggested the possibility of the occurrence of the“flippening”, a situation in which the market cap of Ethereum overtakes the market cap of bitcoin.  Some researchers including Boom head of  global policy and communications Eli Dourado revealed various statistics  and measures that could potentially point toward the possibility of the  flippening. 

 At the time, the market cap of  Ethereum was closing in on the $40 billion margin and the price of  Ethereum’s native token Ether reached $396, moving closer to the $400  region. Yet, after a major cryptocurrency market correction which led to  the decline of nearly all cryptocurrencies in the market, the market  cap of Ethereum declined by around $15 billion, from $36 billion to $21  billion. Ethereum has recovered since the  correction that occurred on June 27, as the price of Ether recovered  beyond the $300 region. At the time of reporting, the market cap of  Ethereum is $28 billion, which is still significantly lower than where  it was earlier this month. Analysts and investors including  prominent venture capitalist Fred Wilson and Charlie Shrem noted that  the market cap of Ethereum declined due to the sell off of investors.  Shrem, cryptocurrency pioneer and the COO of cryptocurrency wallet  platform operator Jaxx, particularly emphasized that the market cap of  Ethereum was on an upward trend due to the emergence of investors  looking into ICOs as short-term investment schemes. “ETH is rising because new users want  to “get rich quick with ICO’s”. They don’t care about the ETH price,  and they aren’t holding. All the supply gets locked by the ICO’s in the  contract. They won’t sell because the price is rising. Demand grows,  supply is reduced. Eventually there is a “price break” and all the ICO’s  need to protect their raise so they dump for BTC/USD. At first, they  use OTC market. But as more sellers offer OTC, the price on exchanges is  faster/easier so they dump on exchanges,” wrote Shrem. The Ethereum network is struggling  with scaling despite a lack of actual users. There exists a small group  of users that may utilize Ethereum as a store of value and as a digital  currency. However, Ethereum was not developed as a store of value since  the beginning and it prioritizes flexibility in order to provide an  efficient ecosystem for decentralized applications and decentralized  autonomous applications (DAOs). In a recent blog post, Coinbase  co-founder Fred Ehrsam revealed that the Ethereum network would have to  improve by a rate of 100x to allow a decentralized application with 1 to  10 million users to function and operate. In other words, there still  isn’t a decentralized application with an actual user base and the vast  majority of ICOs that have raised hundreds of millions of dollars have  raised capital with no viable project, program and working prototype.  “While it’s tricky to make accurate  estimates when combining scaling improvements, it’s conceivable we could  see a 100x improvement by the end of 2018, which would allow a 1–10m  user app,” wrote Ehrsam. In order for Ethereum to come close  to “the flippening,” its ecosystem of decentralized applications will  need to acquire actual user bases and justify their value to the public.