In the wave of rapid evolution of digital assets, enterprises and institutions are continuously adjusting their asset allocation strategies. For a long time, Bitcoin (BTC) has been regarded as the most robust value storage tool due to its scarcity and clear monetary policy. However, now some digital asset treasuries (DAT) focusing on Ethereum (ETH) are quietly rising, believing that ETH is the core asset with greater potential for the future.

ETH has richer participation channels compared to BTC. Not only can it replicate BTC's strategies for lending, financing, options, etc., but ETH can also obtain network rewards from the blockchain itself through staking. Additionally, the DeFi ecosystem brings extra liquidity and sources of income for ETH. Therefore, the asset appreciation path for ETH is more diverse.

From the perspective of monetary mechanism evolution, Ethereum is also continuously evolving. Its historical inflation rate was once higher than BTC, but it has undergone two critical mechanism transformations:
EIP-1559 (August 2021): Introduced a base fee burning mechanism, which actually reduced total supply despite increased trading activity;
The Merge (September 2022): The network shifted to Proof of Stake (PoS), significantly reducing block rewards.
These changes have pushed ETH into a low or even negative inflation phase. Data shows that from October 2022 to April 2024, ETH's total supply decreased from about 120.6 million to about 120.1 million, with an annualized inflation rate of -0.25%. Although the recent increase in TPS has reduced the burning speed, ETH's annualized inflation is still only +0.38%, lower than BTC's +0.84% during the same period.

However, advantages are not eternal. Bitcoin will experience a new round of halving in April 2024, further compressing its inflation rate. If this trend continues, BTC's inflation level will further approach 0% in the coming years and may fall below ETH by 2028.

But Bitcoin faces a long-standing unresolved issue—the security budget dilemma. Currently, miners' income heavily relies on inflation issuance rather than transaction fees (2024: $14.64 billion vs. $278 million). As inflation rewards are gradually reduced, the incentive mechanism of the Bitcoin network will be under pressure unless BTC prices continue to rise significantly or a new economic model is designed.
One possible solution is for Bitcoin to introduce 'sustained inflation' through protocol upgrades, but this would undermine the belief in Bitcoin's monetary policy being 'immutable' and could weaken the criticism of Ethereum's 'policy flexibility.'
More critically, the governance structure of the BTC system is dominated by miners, while ETH's Proof of Stake is more inclined towards the collective will of token holders. This means that the direction of the Ethereum network is more determined by users rather than miners, and its 'holding is participating' mechanism strengthens the power of token holders.

Overall, BTC, as digital gold, remains robust, but ETH shows more potential in terms of flexibility, income paths, and network governance. Who will emerge as the superior asset in the future may still need time to verify, but the upward potential of ETH is clearly not to be ignored.

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