Ethereum surpasses Bitcoin as the new favorite store of value, and the advantages of choosing ETH for the treasury are becoming increasingly evident.

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Ethereum gradually surpasses Bitcoin in the competition for value storage

According to analysts, Ethereum is gradually surpassing Bitcoin in the field of value storage, becoming a stronger competitor. This trend is mainly due to the increasing popularity of Digital Asset Treasuries (DATs), with global enterprises increasingly opting for Ethereum and Bitcoin as digital asset reserves.

Initially, Bitcoin became the preferred choice for DATs due to its fixed supply and recognized stability. However, recent developments have sparked greater interest in Ethereum in the market. Changes in the regulatory environment in the United States have highlighted the importance of stablecoins and tokenization, which are precisely the core functions of the Ethereum ecosystem. This has expanded the application scope of ETH beyond its original design purpose, with several major brokers and exchanges launching tokenized stocks on the Ethereum blockchain.

The continuously increasing flexibility of Ethereum is seen as a significant advantage over Bitcoin. Analysts point out that Ethereum offers more possibilities for complex financial strategies, allowing institutions to accumulate ETH more efficiently than they would with BTC. Through Ethereum's staking feature, the treasury can obtain additional ETH by participating in the network, which is a source of returns that Bitcoin cannot provide.

The transition of Ethereum from Proof of Work (PoW) to Proof of Stake (PoS) has had a significant impact on its inflation rate. Data shows that this shift has drastically reduced the supply growth of ETH: from approximately 120.6 million ETH in October 2022 to 120.1 million in April 2024, resulting in a negative inflation rate of -0.25%. In contrast, the supply of Bitcoin increased by 1.1% during the same period, making Ethereum's inflation policy more attractive for ETH holders.

The inflation rate of Bitcoin decreases by 50% after each halving, making its inflation rate more predictable. However, this top cryptocurrency has long relied on inflationary issuance to incentivize miners. Last year, Bitcoin miners earned over $14 billion in massive revenue from inflation rewards. As Bitcoin's inflation rate continues to decline in subsequent halvings, its security model will face increasing pressure, potentially requiring reliance on transaction fees or price increases to sustain itself. In the absence of these supports, the security of the blockchain network may be at risk, which could force significant changes in the economic structure.

On the other hand, Ethereum's PoS model gives token holders more control over network governance, ensuring that decisions regarding network upgrades and economic policies are more directly aligned with their interests. This contrasts with Bitcoin's miner-centric governance model, where the economic incentives of miners often influence decision-making.

Therefore, analysts believe that as Ethereum continues to develop with a more flexible governance structure, it may become a superior long-term value storage tool compared to Bitcoin.

ETH-2.63%
BTC-0.61%
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GasGuzzlervip
· 08-13 05:59
Is BTC really doomed?
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GasGuzzlervip
· 08-13 05:47
All the platforms are doomed!
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TooScaredToSellvip
· 08-13 05:46
The cycle begins again.
View OriginalReply0
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