Bitcoin supporters might choke on their coffee reading that Ethereum has characteristics that give it the upper hand in becoming a better store of value. Papers claim that Ethereum has made advancements to become deflationary because half of its blocks destroy more coins than are created. Bitcoin has been considered an effective hedge against inflation for a long time, which earned it the status of a store of value, but the notion has come under threat lately because Ethereum’s latest protocols seem to be better. This assumption is based on the introduction of the Ethereum Improvement Proposal 1559, which promoted the reduction of the ETH supply that is available on the market. After its introduction, part of the transaction fees are burned, so the coins are removed from circulation. Over the years, the issuance rate of new ETH will be 0.98%, while BTC’s will reach 2%.
Ethereum has followed a deflationary trajectory recently, which powers its improved performance. Its latest improvements have caused more investors to search for exchange platforms where to purchase Ethereum because they want to add ETH to their portfolios before it gets too expensive.
What do Experts Have to Say About Ethereum Becoming a Store of Value?
Since its inception, Bitcoin steadily built an adamantine status of being the only crypto that also became a store of value, and not even its most mediatized competitor would threaten its position for years until now. More and more crypto experts have become aware that part of its power comes from the fact that it’s the primary blockchain-based currency, and therefore, there are not many other reasons for another asset to be taken down. Ethereum has gained market popularity because it was designed to offer solutions to Bitcoin’s insufficiencies and limitations and built its reputation and functionalities on the tech ground its predecessors took. Its supporters place high bets on Ethereum becoming the next market leader, and some would even take it further and state that Ethereum not only will become a store of value but will be better than Bitcoin.
Bitcoin’s halving had effects outside its network and helped Ethereum increase in price. It’s not the first time a Bitcoin halving event has impacted other crypto projects; previous ones also caused price spikes. However, the 2024 halving caused heavier influxes of capital in the Ethereum network, which could only benefit the second-largest cryptocurrency by market capitalization.
This bull market marks the start of a battle between Ethereum and Bitcoin to become stores of value. And while one is already considered as such, the other tries to assert its dominance.
Let’s Discuss Ethereum’s Possible Dominance in the Market
Bitcoin and Ethereum experienced several bear markets, and they both proved quite resilient, considering they rose from their ashes every time. While many expected each of their dips to be the last one and the projects never to bounce back again, they proved that they are able for dramatic comebacks. The present bull market has generated a ripple effect in the sector, powering Bitcoin, Ethereum, and all the other major blockchain-based assets to achieve their full potential. Ethereum and Bitcoin started in 2024 on the right foot, and they have registered progress in value over the last few months.
The current trends provide Ethereum with the necessary sway to destabilize the market and replace the front-runner. According to its supporter, it’s right at Bitcoin’s heels. Suppose we check its historical performance for the last three years. In that case, we can easily notice that its value inflated by 147% and brought significant rewards to investors who added it to their portfolios.
In this context, not a few times has Ethereum been named a reliable store of value, and investors turn their attention to it when they want to invest capital in the crypto sector.
This doesn’t mean that Bitcoin’s price fails to perform well, but given its exorbitant price, Ethereum has become the better alternative for those who want to invest in an alternative asset to boost their profit and protect their wealth.
Ethereum has a Four Times Higher Market Cap Than Its Competitors
Bitcoin and Ethereum market caps combined account for around 70% of the entire market. The first cryptocurrency has over $1.4T, while the second reached $460B. Yes, there is a huge discrepancy between the two, but let’s not prevent it from recognizing Ethereum’s true value; for this, one must check its price per coin and overall performance in time. While it’s smaller in market capitalization than Bitcoin, it has a four times higher market cap than the next digital currency.
Altcoin projects with potential are several, and many more will arise in the future, but it’s challenging to catch up with an established project like Ethereum. At present, there is no cryptocurrency besides Bitcoin to stand the ground and overcome the success of Ethereum.
The Bottom Line – is Ethereum a Store of Value?
Crypto experts believe that after the Merge, Ethereum has inevitably turned into some sort of store of value because users are staking their ETH in the protocol to secure it. The Merge transformed the blockchain into an eco-friendlier one because it transitioned it from the proof-of-work consensus to the proof-of-stake one. Its use of ETH as collateral has brought it closer to becoming a store of value because it’s the type of asset that secures money. After the merge, ETH is used to power the protocol and as a unit for the goods available on the Web. 3.
Reasons why Ethereum could be considered a store of value:
– Ethereum has the best monetary policy in the sector at the moment, thanks to its proof-of-stake consensus and deflationary fee burn mechanism.
– Its native staking yield is enhanced when the activity gets more intense in the ecosystem.
– The PoS algorithm has a low environmental footprint, low infrastructure requirements, and powers an inexpensive coin issuance.
– The PoS consensus creates a strong economic barrier.
– Ethereum has a public infrastructure layer that organizations in the financial sector can use to improve their performance, boost efficiency, streamline processes, and save resources.
The supporting community promotes the hypothesis that Ethereum could be a better store of value than Bitcoin.
