Will ETH Outlast BTC?

The Middle East crisis is cooling off, though it could heat back up at any time. Bitcoin and the rest of the crypto market have responded well to the improving outlook, although, as today’s forward guidance points out, bear market rallies can be traps for the unwary.

This week’s newsletter also takes a dive into a recent report that’s designed to outline the bull case for ETH, in an attempt to give Ethereum an easily digestible boost in the eyes of investors across the spectrum. Let’s see if it can do the trick.

🥷 Stealth Mode 🥷

The spectre of a US central bank digital currency was supposed to have been exorcised. Donald Trump had made his opposition clear and was as good as his word once he returned to the White House, signing an Executive Order prohibiting the development of a digital dollar.

But, while the technology might be officially proscribed, it’s another matter behind the scenes. The unstoppable growth of dollar-pegged stablecoins - primarily backed by US government debt - represents the establishment of programmable money by stealth.

In today’s video, we uncover the moves afoot behind the scenes to make stablecoins a pillar of US financial infrastructure and examine why top government officials are working to make sure it happens sooner rather than later. Plus, we reveal who the real winners of this push are going to be (spoiler: it’s not the American people).

You can watch that video here.

📈 Crypto Market Forecast 📈

The Iran war ceasefire remains intact, but only just. Trump extended the pause indefinitely last week, yet Tehran has made clear it will not negotiate while the US blockade persists. On Friday, Iran officially denied any request for direct talks, even as Trump dispatched Witkoff and Kushner to Pakistan for another round. Oil sits near $97 per barrel; gold has climbed above $4,700 per ounce. The ceasefire is fragile, and markets know it.

Against this backdrop, Bitcoin has pushed toward $78,000 and is now testing the resistance zone that has capped every rally since November. The CME gap at $77,400 has been filled, and the next key levels are $78,000 to $80,000: precisely where large sell orders are clustered on order books, according to on-chain analysts. The question is whether this rally has legs or whether we are watching a bear market bounce finding its ceiling.

There are reasons for cautious optimism however. ETF inflows hit $1.4 billion last week, the strongest week since January. BlackRock alone bought 18,180 BTC worth roughly $1.4 billion. Strategy added another 34,164 BTC for $2.54 billion, pushing its holdings past 815,000 coins and surpassing BlackRock's total for the first time.

Funding rates remain deeply negative, historically a contrarian signal. The last time perpetual funding was this bearish was late 2023, just before the rally that took Bitcoin from $25,000 to the all-time high. Shorts are crowded. A squeeze is possible if the right catalyst appears.

Kevin Warsh's Fed chair confirmation hearing provided that catalyst for risk assets more broadly. Warsh told the Senate that digital assets are "already part of the fabric" of the US financial system and confirmed the Fed has no legal right to issue a CBDC. Treasury Secretary Bessent backed him, urging Congress to pass market structure legislation so the US can lead on crypto rather than cede ground to competitors.

Morgan Stanley's spot Bitcoin ETF drew over $100 million in its first week, their most successful launch ever. A US military commander told the Senate the Pentagon runs a Bitcoin node and sees crypto as an instrument of American power projection. The institutional infrastructure is being built in plain sight.

Yet macro headwinds remain severe. The CFTC is probing suspicious oil futures trades that preceded Trump's Iran announcements, suggesting someone has been trading on inside knowledge of presidential decisions (and if that comes as a surprise, then you really haven’t been paying attention). Private credit stress meanwhile continues to spread; European bond yields remain elevated on fears of fiscal damage from the energy shock. The IEA warned that Europe has only six weeks of jet fuel remaining if Hormuz stays restricted.

DeFi took a hit this week. The Kelp DAO exploit drained $293 million, believed to be the work of the Lazarus Group. Aave's TVL dropped over $8 billion in two days as users withdrew funds. The hack is a reminder that on-chain risk has not disappeared, even if BTC and ETH themselves were unaffected.

The directional call: Bitcoin is likely to fill the resistance zone between $78,000 and $80,000 in the coming week. A decisive break above $80,000 would require either a genuine peace deal in Iran or a dovish shift from the Fed, neither of which looks imminent.

More probable is a rejection in this range followed by a retest of lower levels, potentially the $72,000 to $74,000 zone where buyers emerged in April. This is still a bear market rally in a midterm year, and midterm years historically see weakness into May.

🐂 ETH Bullcase of the Week 🐂

Every cycle produces its canonical documents.

For Bitcoin, there was Szabo on Bit Gold, then Saylor's one-hour pitch decks, and eventually the pristine-collateral framing that got BlackRock across the line.

For Ethereum however, there has never really been a single piece of writing that an institutional allocator could read on a flight and find themselves convinced upon landing.

What it has had, for the better part of a decade, is an argument in scattered pieces. Whether it be the ‘ultra sound money’ narrative, the ‘digital oil’ narrative, the ‘triple-point asset’ framework or even the ‘productive collateral’ narrative, they’ve all existed at different points in time over a decade of Ethereum’s existence. While the ideological framework for a proper thesis technically exists, it has never been assembled in one place, nor has it been written for non-believers.

Until now, that is.

Late last week, Etherealize Research published a 22-page ETH-bull piece that formalises the investment case for the asset while simultaneously attempting to confront the critiques that have plagued Ethereum over the years.

Titled ‘Ethereum and the Era of Productive Money,’ it makes the case for ETH being a better monetary asset than both BTC or gold. It claims that ETH beats both assets in every aspect, except established history. Perhaps most notable is its framing of ETH being potentially priced at $250,000 per coin if/when the market shares its vision.

That said, like any bull piece, it too has its own biases and quiet contradictions. We’ll point those out, of course. But first, let’s talk about the thesis itself.

Broadly speaking, there are three core lines of argument Etherealize uses to bring investors to its conclusion.

The first and most central point of the thesis is the idea of ETH being the first monetary asset in history that compounds without counterparty risk. It points out that ETH holders can stake their coins directly into the protocol to earn 2% to 4% every year. This yield is native and doesn’t require the holder to lend or rehypothecate their assets to a third-party issuer.

It notes that one of the main appeals for both BTC and gold is the idea of them being money (bearer assets with no counterparty-risk). While gold gets this status due to its physical scarcity and three-thousand-year monetary history, BTC gets its status by virtue of its decentralisation, programmatic scarcity and cast iron (for now, that is) security model. ETH shares this bearer-asset property with both. When held in self-custody, it depends on no issuer, no registrar, and no intermediary.

However, unlike ETH, neither BTC nor gold offer any native counterparty risk-free yield on idle holdings. Etherealize argues that this makes ETH ‘productive’ money that is superior to BTC or gold, drawing the idea from a comment Warren Buffet made in his 2011 letter to Berkshire shareholders.

For context, in that letter, Buffet complained that gold was neither useful nor "procreative," and that an ounce held for an eternity would still be an ounce at its end. Etherealize applies that same critique to BTC. It states that any pristine bearer asset that pays nothing for holding it has to instead earn its entire return through price appreciation, which means it has to keep recruiting new marginal buyers forever.

The report also counters the most obvious objection to this framing – that staking yield is just inflation, a mere accounting illusion. The report responds by pointing out that new supply is offset by Ethereum’s burn mechanism (EIP-1559). It compares the fee-funded portion of staking rewards to a corporate dividend funded by profits. In times when usage eclipses issuance, ETH becomes deflationary. It compares this to a share buyback funded by profits.

The second core argument in the thesis is a critique of Bitcoin’s security model.

Etherealize points out that Bitcoin's security is paid for by miner revenue. This miner revenue comes from two sources: the block reward (which halves every four years and is engineered to reach zero) and transaction fees (which have historically been a rounding error on a chain that caps throughput at three to seven transactions per second).

The unspoken assumption in the Bitcoin thesis is that fees will rise to replace the disappearing subsidy by the time it matters. If they don’t, the hash rate securing the chain will eventually shrink. This in turn shrinks its security budget, making the cost of attack smaller, even as the value secured is rising.

Specifically, Etherealize notes that the cost to attack Bitcoin is nothing but the cost of acquiring sufficient mining hardware to control 51% of the network's hashrate. The report calculates that at Bitcoin's current hash rate of roughly 940 EH/s and an Antminer S23 Hyd cost of $6,695 per PH/s, the total replacement cost of all bitcoin mining hardware is approximately $6.3 billion.

For context, several individual technology companies now spend more than that on computing infrastructure in a single quarter. With that framing, Etherealize argues that Ethereum’s proof of stake model makes the cost of attacking the network much higher. It estimates that attacking the network would require acquiring roughly one third of all staked ETH (around $31 billion at current prices) and that stake would be slashed in the attempt. More importantly, the cost of attack scales with the market value of the asset being secured. If ETH's market cap doubles, the cost to attack it doubles. The report points out that any attempt by Bitcoin to break away from its current model to a proof of stake model would basically amount to a reinvention of Ethereum a decade late.

The third notable argument in the report is a historical parallel to the 19th century demonetisation of silver. This is an interesting argument to say the least. In many ways, this argument may perhaps be of most importance to institutional readers who do not care about crypto politics.

To put it simply, the report highlights how silver "lost" to gold in the 1870s through a coordinated policy convergence when newly-discovered massive silver deposits undermined silver’s scarcity assumption. Germany first, then the United States, then the Latin Monetary Union.

As the gold-silver ratio widened, so did the purchasing power of countries that did not follow the west’s transition. The Etherealize report points to China as a cautionary tale from that transition. For context, China stayed on silver through the late nineteenth and early twentieth centuries and watched its currency lose most of its international purchasing power as silver demonetised. It was eventually forced off the standard in 1935 under conditions that contributed directly to the hyperinflation of the 1940s. Etherealize frames modern-day Bitcoin as being analogous to silver in 1870. It argues that Bitcoin’s flawed security model would see it yield BTC’s ‘digital gold’ status to a superior competitor (ETH in this case).

That said, it’s worth noting that the report’s telling of this event is simplified - which brings us to the second part of this assessment: addressing the inherent biases and contradictions.

You see, in reality, the transition from silver to gold is much more nuanced. It was partly driven by technology (telegraphy and banking made gold practical for small transactions in a way it had not been before) and partly by geopolitical accident (Germany would not have had the gold to act when it did without the Franco-Prussian indemnity). Similarly, it’s still too early to say that Bitcoin is definitively losing the battle to meaningfully maintain its security model.

It’s also worth noting that the $250,000 ETH figure comes from dividing the combined $33 trillion gold and roughly $1.5 trillion bitcoin monetary premium across the ETH supply. While it works as a theoretical possibility, in reality new money hardly ever replaces old money completely. Instead, it layers on top and takes share at the margin. To its credit, Etherealize notes this in the report, disclaiming the figure as a price forecast.  

As for contradictions, it’s worth noting that Etherealize points to ETH’s lack of established history as the one axis on which it is weaker, arguing that the market's risk discount for the asset would close as the protocol ossifies. This contradicts its claims later in the report that Bitcoin's refusal to adapt (i.e., ossification) is precisely what will kill it as a monetary protocol. In other words, ossification is either the disease killing Bitcoin or the cure closing Ethereum's risk discount, depending on which section you’re reading. Both surely can’t be true at once.

That said, the counterparty risk-free compounding argument is the main driver of the report. For what it’s worth, over a long enough horizon it is true that productive money tends to win. Given that spot Ethereum ETFs have been live for some time now, we wonder if the institutional rerating of ETH is already underway.

For what it’s worth, there’s evidence of institutional conviction. Tokenisation efforts have been ramping up in recent years and so has the accumulation of ETH by digital asset treasury companies. In fact, just last week, Bitmine added 101,627 ETH in its largest single-week accumulation of 2026. As things stand now, conviction in ETH will likely only grow stronger from here.

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📖 Quote of the Week 📖

“The time of maximum pessimism is the best time to buy.” - Sir John Templeton

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.