VanEck analysts say Ethereum is steadily positioning itself as a stronger rival to Bitcoin in the race to dominate as a store of value.

This shift is fueled by the rising adoption of Digital Asset Treasuries (DATs), as global enterprises increasingly select Ethereum and Bitcoin to safeguard their digital assets.

Bitcoin was initially favored for Digital Asset Treasuries (DATs) due to its fixed supply and established stability. However, recent developments have driven greater market interest in Ethereum.

In the United States, regulatory changes have underscored the importance of stablecoins and tokenization—foundational features of the Ethereum ecosystem.

As a result, ETH’s use cases have expanded well beyond its original intent, with several major brokerages and exchanges now offering tokenized stocks on the Ethereum blockchain.

In addition, Ethereum’s expanding flexibility is widely viewed as a key advantage over Bitcoin.

According to VanEck analysts, Ethereum enables a broader range of complex financial strategies, allowing institutions to accumulate ETH more efficiently than BTC.

With Ethereum staking, treasuries can earn additional ETH by contributing to network security—yield opportunities that Bitcoin cannot directly provide.

Ethereum’s move from Proof of Work (PoW) to Proof of Stake (PoS) has had a significant effect on its inflation rate.

VanEck data shows this shift resulted in a sharp drop in ETH supply growth: from about 120.6 million ETH in October 2022 to 120.1 million ETH in April 2024, equating to a -0.25% deflationary rate.

By comparison, Bitcoin’s supply grew by 1.1% over the same period, making Ethereum’s inflation policy more attractive to ETH holders.

Bitcoin’s inflation rate is reduced by 50% with each halving, which makes its inflation trajectory more predictable. However, the key concern is that Bitcoin has long depended on inflationary block rewards to motivate miners.

In the past year, Bitcoin miners collectively earned over $14 billion in inflation rewards.

As Bitcoin’s inflation rate continues to fall with future halvings, its security model will come under increasing pressure, potentially forcing a greater dependence on transaction fees or price appreciation. Without these supports, blockchain network security could be at risk and may require significant changes to the economic model.

Conversely, Ethereum’s PoS framework gives token holders more control over network governance. Decisions about upgrades and economic policies are more clearly aligned with their interests.

This contrasts with Bitcoin’s miner-driven governance model, where miners’ economic incentives often guide decisions.

Accordingly, VanEck analysts believe that as Ethereum evolves with a more adaptable governance structure, it could ultimately prove to be a better long-term store of value than Bitcoin.

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