By contrast, Ethereum was designed to facilitate different types of online transactions, such as executing agreements between parties (smart contracts), powering decentralized finance apps and businesses (dApps and DAOs), and supporting entrepreneurs, artists, and the like (NFTs, for example). As a result, Ethereum is sometimes referred to as “digital oil.”
If Ethereum usage continues to rise, and supply begins to contract, these two forces combined could lead to a flippening. However, bear in mind that a flippening scenario doesn’t necessarily mean Ethereum price would go up. This flip in market cap could still play out even if Ethereum falls in value but Bitcoin’s value falls by an even greater percentage. Basically, it’s wise to exercise caution here since a potential flippening doesn’t make Ethereum a good investment.
As with other investment options in the burgeoning crypto economy, potential investors should weigh the risks of buying cryptos such as Bitcoin and Ethereum. Crypto prices are volatile and will likely continue to be since the technology is still developing and rapidly changing. Take your time as you learn about this fast-evolving industry. If you decide to invest at all, most investors should make crypto holdings part of a larger diversified portfolio strategy.