BTC’s long been the digital Store of Value, now Fidelity and VanEck say ETH belongs too. We dig in.
Our latest report, in collaboration with @glassnode, explores usage behaviour for BTC and ETH, and whether it aligns more with a Store of Value or Utility asset.
Dormancy between BTC and ETH is diverging.
ETH’s long-term holders are mobilising their old coins at a rate that’s 3x faster than BTC’s long-term holders, signalling ETH's long-term holders are more willing to part with their coins, pointing to utility-driven behaviour.
Turnover is low for both assets, though higher for ETH.
BTC turns 0.6% of free float per day, while ETH turns 1.3%, 2x that of BTC. Both sit above gold’s 0.3% per day, yet are multiples below USD’s 20% per day velocity. These stats are savings-like, not fiat-like.
CEX balances are falling as institutional wrappers expand.
CEX-held BTC declined by 1.5% and ETH nearly 18%, as assets moved into ETFs (6.7% of BTC, 5.2% of ETH) and DATs (3.6% of BTC, 4.9% of ETH). This is a shift from liquid venues to 'sticky' institutional custody.
These new institutional wrappers are structurally changing the behaviour of both BTC and ETH.
Anchored float e.g. spot ETFs, native staking, or payment channels, naturally reduce turnover. Today, 1 out of every 4 ETH is locked in native staking or an ETF.
ETH is inherently a more productive asset than BTC.
BTC’s productive float has been bolstered by Strategy’s securitisation of the asset. ETH sits at 4x that of BTC given its LST balance and use within DeFi. This dilutes ETH's SoV-ness, with BTC leaving more coins unencumbered.
Contextualising the three money roles of assets.
Our radar shows distinct trade-offs. A pure SoV maximises dormancy and low turnover, while a utility pushes productive float and turnover higher, and a medium-of-exchange prioritises turnover with minimal anchoring or friction.
Anchoring behaviour to savings keeps BTC aligned with SoV usage.
High dormancy and low turnover pull coins out of the tradable pool. With a small productive float deployed mainly as collateral, BTC skews decisively toward Store-of-Value over utility or medium-of-exchange.
Putting more ETH to work powers utility, on top of a sizable reserve base.
Higher turnover and a large productive float show ETH being deployed across staking and within DeFi. High anchored float and falling exchange share add reserve quality, making ETH a utility/SoV hybrid.
We dive into these metrics and make comparisons with gold and fiat currencies in much deeper depth in our full report.
For an alternative take on the SoV argument, beyond first principals, and from a behaviour-first standpoint, this article is a must read: get.glassnode.com/digital-asset-…
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