One of the most controversial expectations in the cryptocurrency market is known as “the flippening”. Flippening is the prediction that Ethereum (ETH) will overtake Bitcoin (BTC) in market capitalization, an event both praised and criticized.
Interestingly, according to a market update on January 17, QCP Capital expects Ethereum to overtake Bitcoin in terms of appreciation in 2024. The trading firm specializing in digital assets and cryptocurrencies shared the report on a Telegram group with 11,000 subscribers.
While not mentioning a “reversal,” QCP Capital did mention positive findings from a previous report on ETH paired with BTC. Furthermore, the trading firm expects Ethereum to continue to outperform the leading cryptocurrency due to ETH spot ETF expectations.
“When ETHBTC traded below 0.05, we mentioned that the cross looked attractive both from a technical perspective and with ETH as a catch-up play. Since then ETHBTC has traded higher as high as 0.06. There We expect ETH to continue to outperform BTC over the medium term as the narrative turns towards potential ETH Spot ETF approvals.”
— Transmission of the QCP capital
Could the approval of a spot Ethereum ETF cause a reversal?
The narrative began to boil after an interview with Larry Fink, CEO of BlackRock Inc. (NYSE: BLK), on CNBC. Specifically, Fink explained that BlackRock sees value in tokenization and believes the SEC will approve an Ethereum spot ETF.
Notably, Bitcoin has increased nearly 150% since January 2, 2023, to its current price of $42,418. Rumors and expectations about the approval of a spot Bitcoin ETF gained traction during this period as the market priced it in.
Similar price action on Ethereum would take the leading Web3 and DeFi blockchain to above $6,235. This would bring ETH’s capitalization to around $750 billion, still almost $100 billion less than Bitcoin’s current market capitalization. Therefore, even if BTC maintained its value of $830 billion at the time of this writing, it would not be enough for a “flippening”.
However, QCP Capital is still optimistic about a medium-term outperformance of the second largest cryptocurrency compared to the largest. According to the trading firm’s analysis, ETH could offer a better risk-reward ratio for investors in 2024.
However, investing in this market is unpredictable and caution is key when deploying capital for price speculation.
Disclaimer: The content of this site should not be considered investment advice. Investing is speculative. When you invest, your capital is at risk.
