Ethereum has long played second fiddle to the headline-grabbing Bitcoin, but the world's second most valuable cryptocurrency has plenty of defenders who say it's destined for the throne.

Crypto hedge fund manager Rahul Rai told Business Insider this month that Ethereum, or Ether for short, would overtake Bitcoin in the next six or so months.

The Gen Z investor's timeline may be ambitious, but he's not alone in arguing that ether could pull ahead. This moment — commonly referred to as "the flippening" by crypto experts — has long been discussed and debated in the blockchain community as a distinct possibility.

In more institutional corners, meanwhile, Goldman Sachs analysts predict that ether will rally up 80 percent to $8,000 in the next two months, if its historic correlation with inflation holds. 

That kind of growth trajectory, itself on the higher end of most estimates, would only continue the trend of Ethereum growing at a faster pace than Bitcoin, which it has over the past year. 

Indeed, on certain fronts, Ethereum is already outpacing Bitcoin. While Bitcoin is still far and away the leader when it comes to market cap, Ethereum hosts far more transactions. 

According to data on The Block, there were 38 million transactions on the Ethereum network in October, compared to 8.45 million transactions on the Bitcoin network.

Of course, in 2021, a rising tide has lifted all boats when it comes to crypto. So Ethereum continuing to rise alongside other cryptos is one thing. Taking the top spot is another.

Crypto Coup

So what's the argument for a crypto coup?  

The case that a flippening is inevitable comes in different forms, from the highly technical to more straightforward projections about the future of crypto, but one area many focus on is the fact that Ethereum hosts most NFTs and decentralized finance (defi) applications. 

A report from Cointelegraph Research, for instance, found that Ethereum currently dominates 97 percent of the NFT market. 

"Ethereum is a generalized, programmable settlement layer for anything of value, which expands well beyond Bitcoin’s core capabilities," wrote Lucas Campbell, editor and analyst for the crypto podcast Bankless and vocal believer in the flippening, in a recent blog post.

That explains, in part, why Ethereum hosts so many more transactions than Bitcoin. It's fundamentally serving a different role in the crypto market place — specifically, as a kind of home base for a number of other applications in the expanding defi universe. 

Side-by-side graphs of their respective prices and frenzied hype from investors might obscure this fact, but for those watching the crypto market closely, it's hard to forget.  

"One thing that we've learned over the last couple of years about crypto assets is that they're really very different," said Matt Hougan, CIO at Bitwise, a crypto index fund manager. "People used to think of it as a single asset class and the assets within it as largely fungible, but the broader market has realized that that's not true." 

Those who predict a flippening, however, argue that Ethereum's use case is more conducive to long-term growth. In addition to hosting more transactions, it also generates significantly more fees per transaction, which some argue means there is more overall trust in the network. 

"Simply put, Ethereum offers an attractive ecosystem filled with economic and social opportunities that are worth paying for," Campbell wrote. 

Digital Gold Dust

Bitcoin primarily serves as a non-sovereign store of value, or digital gold dust, to use a term popular in crypto circles, so it attracts investors who are mostly interested in a hedge against inflation.  

It's also further along in penetrating the market for its particular use case. In other words, while it's doing something different, it's been doing what it does longer. 

Hougan noted that Bitcoin has very few competitors when it comes to non-sovereign stores of value, whereas Ethereum has numerous in the defi space, such as Cardano and Solana, and other altcoins further down the ladder that could emerge in the future. 

"There's a yawning gap between Bitcoin and the next competitor for the non-sovereign store of value or digital gold space," he said.  

Given what Ethereum does — provide a base layer for defi — there's also a greater possibility that no single winner takes over the market. Multiple altcoins could serve that role, while Bitcoin may have a better chance of crushing its competition for a store of value.

"The market that Ethereum is going after could be fractured by multiple crypto assets, whereas Bitcoin could be the entirety of its primary use case," Hougan said. 

He added that Ethereum also faces more headwinds from regulators; what defi elements will ultimately be allowed is a more open question than the straightforward use-value of Bitcoin. 

"Long-term, if Ethereum is successful at achieving its ambition, it seems logical to me that it will become a larger asset than Bitcoin, but there's no guarantee that that will happen," he said.

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