According to analysts at Vanek, Ethereum is steadily positioning itself as a stronger candidate for Bitcoin in the race for domination as a valuable store.
This shift is driven by the expansion of the adoption of the Ministry of Digital Assets Treasury (DATS). Bitcoin in it Global company.
Eth Treasuries
Initially, Bitcoin was a major option for the Digital Treasury due to its fixed supply and perceived stability. However, recent developments have led to increased interest in Ethereum.
Changes in US regulations highlight the need for stability and tokenization, which are core features of Ethereum’s ecosystem.
This allowed ETH to move beyond its original use cases, and exchanges with several large brokerage companies have launched tokenized stocks on the Ethereum blockchain.
Furthermore, Ethereum’s increased flexibility is considered a greater advantage over Bitcoin.
Analysts at Vaneck pointed out that Ethereum offers more opportunities for sophisticated financial strategies and allows entities to accumulate ETH more efficiently than BTC.
Ethereum’s staking capabilities allow the Treasury to earn additional ETH through network participation. This provides a source of income that Bitcoin does not provide in a similar way.
Ethereum and Bitcoin inflation
The transition from Ethereum’s Proof of Work (POW) to Sport-of-Stake (POS) had a major impact on its inflation rate.
According to Vaneck, the change markedly reduced the supply growth of ETH, from around 120.6 million ETH in October 2022 to 120.1 million ETH in April 2024, bringing negative inflation to -0.25%.
In comparison, Bitcoin supply increased by 1.1% over the same period, making it even more advantageous for those holding ETHEAM’s inflation policy.
Bitcoin’s inflation rate drops by 50% after half of each, making BTC’s inflation rate more predictable. This challenge lies in the reliance of topcrypts, which rely on issuing inflation to encourage miners in the long term.
Last year, Bitcoin Miners earned a substantial amount from inflationary rewards, totaling over $14 billion.
Therefore, when Bitcoin inflation decreases with subsequent halving, its security model faces an increase in pressure to rely on trading fees or price increases. Without these, the security of blockchain networks could be at risk and could force potentially significant economic change.
Meanwhile, Ethereum’s POS model provides more control over network governance in token holders, ensuring network upgrades and economic policy decisions are more directly aligned.
This contrasts with Bitcoin’s miner-centric governance model, where miners’ economic incentives often influence decisions.
Therefore, as Ethereum continues to evolve with this more flexible governance structure, Van Eck analysts argue that it could emerge as a longer-term value store than Bitcoin.