VanEck Says Ethereum Could Become a Better Store of Value Than Bitcoin

VanEck published its crypto market recap for July, and one section suggested Ethereum has the potential to outshine Bitcoin as a store of value. 

According to the report, published on Aug. 5, while Bitcoin still holds the lead, there are several reasons why Ethereum is closing the gap and may eventually pull ahead.

Ethereum Treasuries Catching up

For one, VanEck explained that companies originally favored Bitcoin for their digital treasuries because of its predictable supply and strict monetary policy. Bitcoin’s capped issuance gave it an edge as a long-term store of value. 

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However, things have started to shift. Specifically, more firms are now leaning toward Ethereum, especially those looking to grow their holdings through staking and decentralized finance.

For context, VanEck currently tracks eight major Ethereum-focused digital treasuries. Together, they hold about 1.46 million ETH. Bitmine Immersion Technologies owns the largest share, holding 625,000 ETH worth roughly $2.4 billion, which makes up nearly half of the total. 

Notably, when VanEck added ETH reserves from companies and exchange-traded products (ETPs), total institutional holdings reached 8.2 million ETH. This represents about 6.8% of Ethereum’s circulating supply.

Bitcoin still dominates in this area. In comparison, institutions hold 15.6% of all BTC in circulation. For Ethereum to catch up, VanEck said treasuries would need to grow 4.5 times larger, while ETH-based ETPs would have to expand by 1.4 times. 

Ethereum Offers More Flexible Treasuries

Still, VanEck argued that Ethereum brings more options to the table. Firms can use ETH in more flexible ways than Bitcoin. They can stake it, earn network rewards, and tap into DeFi tools to boost returns. Meanwhile, Bitcoin treasuries mostly rely on lending or options trading.

Interestingly, Joseph Lubin, CEO of SharpLink and co-founder of Ethereum, made a similar argument last month. Lubin claimed that Ethereum is a better asset for company treasuries than Bitcoin due to its additional features like staking.

Ethereum Now Boasts Lower Inflation than Bitcoin

Meanwhile, in the July report, VanEck also focused on how the Ethereum economy has changed. The report noted that Ethereum once had a higher inflation rate than Bitcoin: 14.4% versus 9.3%. 

However, two major upgrades changed that. First, Ethereum introduced EIP-1559 in August 2021, which burns a portion of ETH transaction fees. This move helped lower the overall supply during periods of heavy network activity. 

Then, in September 2022, Ethereum switched from proof of work to proof of stake. This upgrade, known as the Merge, dropped daily ETH issuance from around 13,000 to just 1,700.

By March 2023, ETH’s inflation rate had fallen to just 0.2%, while Bitcoin’s had grown by 3%. VanEck highlighted that Ethereum’s tighter supply and built-in yield give it an edge that Bitcoin can’t match. Nonetheless, it suggested Bitcoin inflation could drop with subsequent halvings.

According to the report, Ethereum also hands more influence to its holders. Specifically, ETH owners help shape the network’s direction, while Bitcoin’s governance remains far more limited.

Essentially, VanEck concluded that Ethereum’s flexible economics, expanding institutional presence, and built-in utility could eventually make it a stronger long-term asset than Bitcoin.

High-Profile Figures Backing ETH in Recent Weeks

Several high-profile figures in the crypto space have also favored Ethereum over Bitcoin in recent weeks. For instance, last month, Galaxy Digital CEO Mike Novogratz said he expected ETH to outperform Bitcoin over the next three to six months. 

Meanwhile, this month, Bit Digital CEO Sam Tabar said ETH offers both growth and a 3–4% staking yield. He compared ETH to oil, something with real-world utility, while he described Bitcoin as gold: valuable, but static. 

Anthony Georgiades, General Partner at Innovating Capital, made a similar comment on July 8. He said holding ETH is like owning infrastructure, not just an asset.