VanEck: Ethereum's status as a store of value could surpass Bitcoin
TechFlow Selected TechFlow Selected
VanEck: Ethereum's status as a store of value could surpass Bitcoin
VanEck analysts said that in the race for dominance as a store of value, Ethereum is steadily becoming a stronger competitor to Bitcoin.
Navigating Web3 tides with focused insightsSource: cryptoslate
Translation: Blockchain Knight
VanEck analysts say Ethereum is steadily becoming a stronger competitor to Bitcoin in the race for dominance as a store of value.
This shift is driven by the growing popularity of digital asset treasuries (DATs), with global enterprises increasingly favoring Ethereum and Bitcoin as choices for digital asset holdings.
Initially, Bitcoin was the primary choice for digital asset treasuries due to its fixed supply and recognized stability. However, recent developments have sparked greater market interest in Ethereum.
Regulatory changes in the U.S. have highlighted the importance of stablecoins and tokenization—core functionalities within the Ethereum ecosystem.
This has expanded ETH's utility beyond its original design, with several major brokerages and exchanges already launching tokenized stocks on the Ethereum blockchain.
Additionally, Ethereum's increasing flexibility is seen as a significant advantage over Bitcoin.
VanEck analysts note that Ethereum enables more complex financial strategies, allowing institutions to accumulate ETH more efficiently than BTC.
Through Ethereum’s staking mechanism, treasuries can earn additional ETH by participating in the network—a source of yield that Bitcoin cannot offer through similar means.
Ethereum’s transition from proof-of-work (PoW) to proof-of-stake (PoS) has significantly impacted its inflation rate.
According to VanEck data, this shift has sharply reduced ETH supply growth: from approximately 120.6 million ETH in October 2022 to 120.1 million ETH in April 2024, resulting in a -0.25% deflationary rate.
In contrast, Bitcoin’s supply grew by 1.1% during the same period, making Ethereum’s inflation policy more attractive to ETH holders.
Bitcoin’s inflation rate drops by 50% after each halving, making it more predictable. However, the issue lies in this top cryptocurrency’s long-term reliance on inflationary issuance to incentivize miners.
Last year, Bitcoin miners earned substantial revenue from inflation rewards, totaling over $14 billion.
Therefore, as Bitcoin’s inflation rate continues to decline in future halvings, its security model will face mounting pressure, potentially relying on transaction fees or rising prices to sustain itself. Without such support, the blockchain’s security could be at risk, possibly forcing major economic restructuring.
On the other hand, Ethereum’s PoS model grants token holders greater control over network governance, ensuring decisions on upgrades and economic policies align more directly with their interests.
This contrasts with Bitcoin’s miner-centric governance model, where miners’ economic incentives often influence decision-making.
Thus, VanEck analysts believe that as Ethereum continues to evolve with a more flexible governance structure, it may emerge as a superior long-term store of value compared to Bitcoin.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
@CryptoSlate
