Whenever the 'big boss' of the crypto world is mentioned, everyone's first reaction is Bitcoin—'digital gold' and 'king of consensus'; these labels have long been welded onto it. I absolutely do not deny Bitcoin's status in the community, just as no one in the financial world would question gold's safe-haven properties. However, if we are talking about the potential of the next cycle, if we only focus on 'consensus', we are likely to miss out on the real big opportunity.
Today I want to say something bold: in the next cycle, the 'hidden value' of Ethereum is likely to complete a 'curve overtaking' of Bitcoin. This is not blind optimism; it is a conclusion I reached after thoroughly analyzing the essence of the two assets. Bitcoin resembles 'hard currency of the digital age', while Ethereum has long surpassed the category of 'coin' and has grown into an ecological empire with its own 'blood-making ability'. Its value is hidden in the 'social layer' behind the technology, and this difficult-to-replicate advantage is the true engine of compound interest.
First, let's clarify a core logic: to judge the long-term potential of an asset, we first look at whether it is 'driven by currency premium' or 'driven by productive assets.' This point is the core dividing line between Bitcoin and Ethereum.
Let’s be clear: Bitcoin as 'hard currency' vs Ethereum as 'value generator.'
The value of Bitcoin relies almost entirely on 'currency premium'—in simple terms, 'everyone recognizes it as valuable, so it is valuable.' This consensus stems from its scarcity (total supply of 21 million), degree of decentralization, and the 'hedging property' accumulated over many years. Just like gold, which itself does not generate any income, but because everyone recognizes its value, it can serve as a vehicle for wealth storage. Bitcoin's logic is completely consistent with this; it is more like a 'digital safe,' with its core function being 'value preservation' rather than 'value appreciation.'
But Ethereum is different; it is a typical 'productive asset.' What is a productive asset? It means it can 'create value.' You can imagine the Ethereum ecosystem as a 'digital industrial park,' with ETH as the 'entry ticket' and 'fuel': developers need to use ETH to pay fees to build decentralized applications on it; users also need to interact with these applications using ETH; L2 networks need to anchor to the mainnet, which similarly relies on the value support of ETH. In simple terms, every transaction and every new application born in the Ethereum ecosystem creates real demand for ETH. This 'demand-driven' value growth is far more resilient than simple 'consensus-driven' growth.
For a very intuitive example: over 90% of Bitcoin's on-chain activities are 'transfers'; apart from transferring coins from A to B, there are almost no other uses. In contrast, Ethereum's on-chain activities cover hundreds of sectors such as DeFi, NFTs, games, and social, with new applications and gameplay emerging every day. This difference is like 'a safe used only to store money' versus 'a commercial street that can give birth to countless businesses'—the former has a fixed upper limit on value, while the latter's upper limit on value depends on how many vibrant businesses can be incubated on that street.
The most underrated trump card of Ethereum: 'social scalability' is its moat.
Many people analyze Ethereum, focusing solely on technical terms like 'merger' and 'sharding', while neglecting its core competitiveness—'social scalability.' In simple terms, it's about how many people and resources Ethereum can gather and how many difficult-to-replicate network effects it can form. This 'social layer' advantage is harder to surpass than any technological breakthrough, which is why I firmly believe in its potential.
First is the 'centrifugal force' of developer culture. From its inception, Ethereum has embodied the genes of 'open source and inclusiveness,' attracting the world's top developers. Currently, over 70% of high-quality projects in the crypto space are either developed based on Ethereum or are laid out around the Ethereum ecosystem. This 'gathering effect' of developers forms a positive cycle: the more developers there are, the richer the applications in the ecosystem; the richer the applications, the more developers can be attracted to join. In contrast, other public chains either have very few developers or rely on high subsidies to attract 'temporary workers,' failing to form genuine cultural cohesion. I know many developers who prefer to solve complex fee issues on Ethereum rather than go to other public chains—using their words, 'the developer community on Ethereum offers technical support and inspiration that can't be found elsewhere.'
Secondly, there is the 'network effect' of the L2 ecosystem. Many worry that high transaction fees on Ethereum's mainnet will lead to its replacement by other public chains, but they overlook the explosive potential of the L2 ecosystem. Ethereum's L2 network is like a 'duplicate' of the mainnet, inheriting its security while solving the issues of high fees and slow speeds. More importantly, these L2 networks are not isolated; they are all anchored to Ethereum's mainnet, sharing the same ecosystem. For example, assets on L2 A can be seamlessly transferred to L2 B through cross-chain bridges, and can also be withdrawn to the mainnet at any time. This 'mainnet + L2' architecture forms a huge 'value network': the more users there are, the stronger the liquidity of L2; the stronger the liquidity, the more users and projects it can attract. Many other public chains may seem to have lower fees and faster speeds, but the applications and users in their ecosystems are 'islands of inventory' that cannot form this positive cycle.
Finally, there is the 'user stickiness' of decentralized applications. The applications in the Ethereum ecosystem are no longer 'toy-level': lending and trading in DeFi have become 'digital financial tools' for many; collections and trading in NFTs have formed unique cultural communities; and there are even many enterprises starting to use tools on Ethereum for supply chain management and copyright certification. The reason these applications have such strong stickiness is that they build a 'trust network among users.' For example, a certain DeFi protocol that has been running on Ethereum for several years without any security issues will gain users' trust; this trust will translate into long-term usage habits, which are hard for other public chains to disrupt. It's like getting used to chatting on WeChat; even if other social software has more features, you might not migrate—because your friends and social relationships are all on WeChat. The applications on Ethereum follow the same logic.
The core logic of the next cycle: from 'consensus premium' to 'ecological value capture.'
In the past few cycles, the main line of the crypto market has been 'the diffusion of consensus'—from recognition by a few geeks, to institutional entry, and then retail investors following the trend. The narrative of Bitcoin as 'digital gold' perfectly fits the needs of this stage. However, in the next cycle, the main line of the market will inevitably shift to 'the creation of value'—when everyone knows that 'Bitcoin can preserve value,' people will pay more attention to 'which asset can create more value.'
And Ethereum's 'implicit value' is precisely reflected in this 'value creation.' Its 'social scalability' is turning into real value capture ability: the more applications and users in the ecosystem, the greater the demand for ETH; the greater the demand for ETH, the higher its value; and the higher value can attract more developers and users to join, forming a perfect compounding cycle. This logic of 'the more prosperous the ecosystem, the more value grows' is something Bitcoin's 'consensus-driven' model can never match.
Of course, I'm not saying Bitcoin will become outdated; it will still be the 'ballast' of the crypto market. However, in terms of 'growth potential,' Ethereum is clearly undervalued. It's like the relationship between gold and stocks: gold can preserve value, but the truly valuable stocks that allow wealth to cross classes are often those with core competitiveness. In the crypto market, Bitcoin is 'gold,' while Ethereum is the most potential 'core asset stock.'
Finally, let me say something heartfelt: the essence of investing is discovering 'undervalued value.' Many people still think that 'Ethereum is just a follower of Bitcoin,' but this perception is precisely our opportunity. In the next cycle, the real big trend will no longer be a general rise of 'all coins,' but a 'structural trend of quality assets.'
If you find my analysis today useful, don't forget to like and follow. In the future, I will specifically produce an episode breaking down the three most noteworthy sub-sectors in the Ethereum ecosystem and how to assess the true value of an Ethereum project. Do you usually favor Bitcoin or Ethereum more? Follow me @链上标哥 so you won't get lost!
