A recent report from VanEck, a major investment firm, suggests Ethereum (ETH) might be a better store of value than Bitcoin (BTC). This is a pretty bold claim, so let’s dive into the details.
Why Ethereum? More Than Just a Currency
For years, Bitcoin has been the go-to digital asset for companies building up their reserves. But things are changing. Companies are starting to see Ethereum’s potential as both a money-maker and a deflationary asset (meaning its value could increase over time).
Ethereum’s Inflation Advantage
The report highlights key differences between Bitcoin and Ethereum’s monetary policies. While Bitcoin has a fixed supply, Ethereum’s initial inflation rate was higher. However, two big changes have drastically lowered Ethereum’s inflation:
- EIP-1559: This update “burns” (permanently removes) a portion of transaction fees, creating deflationary pressure when the network is busy.
- The Merge: Switching from Proof-of-Work to Proof-of-Stake drastically reduced the creation of new ETH.
The result? Ethereum’s inflation rate dropped below Bitcoin’s in March 2023. Since then, Ethereum’s supply has barely grown, while Bitcoin’s has increased significantly.
Companies are Betting on ETH
Several companies are already showing their faith in Ethereum by building up large ETH reserves. For example, Bit Digital now holds over 120,000 ETH, and BitMine Immersion Technologies holds over 833,000 ETH – making them the largest known corporate ETH holder.
The Bottom Line
VanEck’s report makes a strong case for Ethereum as a superior store of value. Lower inflation, combined with its growing utility in DeFi, is making it an increasingly attractive option for companies looking to diversify their assets. While Bitcoin still holds its place, Ethereum is definitely making a serious play for the crown.
