VanEck Predicts Ethereum Could Overtake Bitcoin as the Ultimate Store of Value

Move over, Bitcoin—Ethereum's gunning for the throne.

VanEck's latest analysis suggests ETH might just dethrone BTC as crypto's premier store of value. Here's why the flippening could be closer than we think.

The smart money's betting on programmable value

While Bitcoin maximalists cling to digital gold narratives, Ethereum's defi ecosystem keeps minting real-world utility like a Wall Street printing press—except with fewer bailouts.

Gas fees or not, institutional players are waking up to ETH's dual promise: hard money that actually does something. The ultimate hedge in a world where even 'risk-free' treasury yields can't keep up with inflation.

One hedge fund manager puts it bluntly: 'Bitcoin's the fax machine, Ethereum's the smartphone—and nobody's stacking fax machines in their vault anymore.' Ouch.

Ethereum’s Inflation Rate Now Lower Than Bitcoin’s

A key point in VanEck’s report is Ethereum’s reduced inflation rate. Traditionally, Bitcoin has been seen as a solid store of value because of its limited supply—only 21 million BTC will ever exist. But ethereum has made important changes that have significantly slowed the growth of its supply, even turning deflationary at times.

Two major developments led to this shift. First, Ethereum implemented EIP-1559 in August 2021, which introduced a mechanism that burns a portion of ETH transaction fees. This reduces the total ETH supply during times of heavy network activity.

Second, in September 2022, Ethereum transitioned from a Proof-of-Work (PoW) system to a Proof-of-Stake (PoS) model in an event known as The Merge. This eliminated the need to pay miners large amounts of ETH and instead rewarded stakers with much lower issuance. As a result, daily ETH issuance dropped from around 13,000 ETH to just 1,700 ETH.

Since these changes, Ethereum’s inflation rate has dropped significantly. Between October 2022 and April 2024, the total supply of ETH actually decreased, achieving a deflationary annual rate of -0.25%. Even with more recent increases in network activity and supply, Ethereum’s supply growth remains far below Bitcoin’s. Since early 2023, ETH supply has grown by just 0.2%, while BTC has increased by 3%.

More Than Just Supply: Ethereum’s Financial Utility

What truly sets Ethereum apart, according to VanEck, is its financial utility. ETH is not just a passive asset; it can actively generate income. Investors can stake ETH to earn rewards, participate in DeFi protocols to earn yields, or collect network fees.

This flexibility makes ETH attractive for companies that want to make their crypto holdings more productive. Bitcoin, on the other hand, remains a non-yielding asset unless it’s wrapped or used in third-party lending platforms, which introduces additional risks.

Ethereum’s use in decentralized finance (DeFi) also adds another LAYER of value. Many DeFi platforms rely on ETH as collateral or a means of payment. As the ecosystem grows, so does demand for ETH.

Corporations Are Taking Notice

VanEck also highlights a growing trend: more companies are holding Ethereum in their corporate treasuries. For years, Bitcoin was the only crypto asset major firms would consider adding to their balance sheets. But now, that’s changing.

For example, Bit Digital, a cryptocurrency firm, recently passed 120,000 ETH in total holdings. Meanwhile, BitMine Immersion Technologies, a Bitcoin mining company, has over 833,000 ETH—making it the largest known corporate ETH holder.

These companies are not just betting on price appreciation; they’re building strategies around staking and DeFi participation to grow their capital. Ethereum’s combination of yield potential and low inflation is starting to look very appealing from a long-term investment perspective.

What This Means for Bitcoin

This doesn’t mean bitcoin is no longer valuable. VanEck still views BTC as a strong store of value, especially due to its fixed supply and global recognition. However, the report makes clear that Ethereum is catching up—and in some ways, may even be pulling ahead.

Bitcoin’s strength lies in its simplicity and security. It has no smart contracts, no staking, and no complex features, which makes it easier to audit and harder to break. But Ethereum offers more ways for holders to earn yield and interact with the broader crypto economy.

Final Thoughts

The VanEck report suggests that we may be witnessing a shift in the narrative surrounding crypto’s top assets. Bitcoin still has the strongest brand in the digital asset world, but Ethereum’s reduced inflation, increased functionality, and rising institutional adoption are making it a serious contender as the go-to store of value in the future.

As more companies explore ETH for treasury management and as the DeFi ecosystem continues to grow, Ethereum may not just be the foundation of Web3—it could also become digital Gold 2.0.