This is a personal judgment, please take responsibility for yourself.
Note that I am referring to market value; the number of ETH tokens fluctuates slowly.
I believe that the market value of ETH will exceed BTC in the long term, with the following logic:
ETH is inherently deflationary, and coupled with decentralization that is not weaker than BTC, its value storage properties exceed those of BTC.
The security and value ceiling of POS are superior to those of POW.
The development potential of ETH as a world computer.
The limitations of POW.
POW is essentially an imbalanced form of decentralization, where imbalance refers to the discrepancy between computing power costs and currency value.
If a currency has a market value of one trillion, and the cost to control the entire network's mining machines is only ten billion, then capable individuals or organizations can completely choose to make a big score.
The value storage in the form of POW is severely limited by the scale of mining machines; otherwise, the aforementioned risks will occur.
Moreover, the cost of electricity varies by region; POW naturally tends to regions with lower electricity costs, leading to centralization.
BTC is not digital gold.
Contrary to mainstream views, I believe BTC is not digital gold. Because gold is POS, referring to the previous point.
Therefore, ETH should replace a portion of BTC's storage value.
The inherent deflationary nature of ETH.
Because ETH will issue more to stakers, many people believe that ETH is inflationary. I do not think so; I believe ETH is inherently deflationary, or even strongly deflationary.
Because the issuance of ETH is not created out of thin air, nor is it issued to specific entities. As long as you hold ETH, you can natively stake it or stake it through some protocols to earn staking rewards. Therefore, if you use ETH as a store of value, you can completely stake it to earn staking rewards, and the staking yield mathematically is greater than or equal to the overall network's ETH inflation. Hence, ETH is inherently deflationary, and smart contracts will burn a portion of ETH, so during certain periods, ETH will be strongly deflationary.
Additionally, it is worth mentioning that this type of staking currency can yield around 3% annualized return, but the currency itself is in an inflationary model. This is somewhat similar to staking USD to obtain U.S. Treasury bonds.
ETH Flywheel
Due to the aforementioned inherent deflation, the market will eventually react, recognizing that ETH is a better store of value than BTC. Therefore, it is likely that both the demand for ETH will increase, the staking rate will rise, and coupled with the potential future development of dApps, the burning of ETH will further intensify. A terrifying upward flywheel may emerge.
The development potential of ETH smart contracts.
New public chains like SOL and SUI are currently forming competitive dynamics with ETH. For scenarios with relatively low security requirements, such as blockchain games and decentralized social media, I believe these new public chains have more advantages.
However, I believe the reason ETH has not become SOL is not because it cannot, but because it does not want to. Decentralization, low operational threshold, and simplicity and security are ETH's core advantages. I believe that currently, the importance of the security and stability of smart contracts still outweighs efficiency.
From the current situation, no public chain can surpass ETH in terms of decentralization. If dApps solely pursue performance instead of security and decentralization, then why not use Web2? (Of course, decentralization is relative, and it does not mean that chains like SOL, which balance decentralization and performance, have no value.)
Although competition is fierce, I believe ETH, as a world computer, has significant development potential. It does not necessarily have to compete with new public chains in the to-c market; a core financial business + L2 underlying support in the to-b market is also completely feasible.
In summary, I believe that one day ETH's market value will exceed BTC, and it will be a long-term state.
$BTC $ETH
