Why MicroStrategy Chose Bitcoin and Bitmine Chose Ethereum

The Two Companies Shaping the Future of Bitcoin and Ethereum, and the Reality of Their Security Models

※ This article is being published in its current form first and will be updated in 2 days into the final version formatted for Daily Crypto Times (DCT).

The debate over Bitcoin’s long-term survivability has already been explored multiple times. In particular, in the previous article “Will Bitcoin Collapse? Two Giants Hold the Answer”, we examined Bitcoin’s structural risks through the lens of MicroStrategy and BlackRock’s moves.

Another article, “Removing the Hype of Saylor and Tom Lee to Reveal BitMine’s True Structure”, analyzed why Bitmine is focused on ETH and what structural strengths Ethereum possesses.

Building on those two analyses, this article takes a deeper look at why MicroStrategy and Bitmine chose different assets and how BTC and ETH diverge in survivability during a prolonged stagnation phase.

Why is MicroStrategy all-in on Bitcoin, while Bitmine is all-in on Ethereum? Their choices are not a matter of simple preference, but stem from the structural characteristics of each asset and their judgment about long-term survivability.

To understand this, the article converges on a single question: “If, for the next year, Bitcoin stays at 80,000 dollars and Ethereum at 2,500 dollars, which network is better positioned to survive?”

To answer this, we must look beyond simple price or returns and examine how each network’s security model behaves during stagnation. Bitcoin’s PoW is a powerful structure, but it contains three structural weaknesses that must be addressed. This article aims to compare the long-term survivability of the two assets by analyzing MicroStrategy and Bitmine’s strategies while also examining these weaknesses in Bitcoin’s PoW security model.

1) MicroStrategy’s current Bitcoin holdings

MicroStrategy is not just holding Bitcoin; it is the first listed company to elevate BTC to the core axis of its corporate treasury strategy. It currently holds 802,823 BTC, and recently issued STRC preferred shares to purchase an additional 34,164 BTC.

Their strategy is simple: they do not sell Bitcoin and accumulate more whenever an opportunity arises. This accumulation pace is estimated at around 30,000–50,000 BTC per year.

• Total holdings: 802,823 BTC
• Recent purchase: 34,164 BTC
• Share of total supply: about 4%
• Strategy: 100% long-term holding (HODL)
• Accumulation speed: 30,000–50,000 BTC per year

MicroStrategy is not a mere investor; it is a market actor that directly influences Bitcoin’s supply structure.

2) How MicroStrategy’s strategy affects the Bitcoin market

MicroStrategy’s strategy creates multiple layers of impact on the Bitcoin market. Its continuous buying strengthens the long-term demand base for Bitcoin, and its willingness to buy even when the market is shaky helps ease downward price pressure.

MicroStrategy is also the first listed company to officially adopt Bitcoin as a core corporate treasury asset. This precedent gives other companies a sense of legitimacy in holding Bitcoin.

Its long-term holding strategy sends a signal to full node operators, miners, and long-term investors that “Bitcoin will grow over the long term.” As a result, the credibility of the Bitcoin network is reinforced.

3) Bitmine’s current ETH staking status

Bitmine is not merely holding ETH; it is focused on turning it into a productive asset. It is currently staking 4.36M ETH, with a notional value exceeding 10 billion dollars.

The annual revenue generated from staking is about 297 million dollars, and if Bitmine stakes all of its ETH holdings, this revenue could expand to around 410 million dollars.

• Staked amount: 4.36M ETH
• Valuation: 10 billion dollars
• Annual revenue: 297 million dollars
• Revenue if fully staked: 410 million dollars
• Staking ratio: 84%
• Weekly increase: about 100,000 ETH
• Estimated time to reach 5% of supply: early July

Through a compounding-based ETH growth strategy, Bitmine is changing the economic nature of Ethereum.

4) How Bitmine’s strategy affects the ETH market

Bitmine’s large-scale staking creates structural changes in the ETH market. As more ETH is staked, circulating supply decreases, naturally generating upward price pressure.

In addition, Ethereum’s PoS becomes more secure as staking participation increases. Bitmine’s participation thus contributes to strengthening Ethereum’s security and credibility.

ETH is increasingly positioned as a yield-generating asset that naturally produces income through staking, and Bitmine’s aggressive staking further reinforces this narrative.

5) If BTC stays at 80,000 and ETH at 2,500 for a year, who survives better?
And three structural weaknesses of Bitcoin’s PoW security model

Let’s assume the crypto market remains stagnant for a full year. Bitcoin stays at 80,000 dollars, and Ethereum at 2,500 dollars, with virtually no price movement. In such a scenario, most investors converge on a single question:

“Which one is better positioned to survive?”

On the surface, ETH appears more favorable because staking rewards exist, while BTC generates no yield simply by being held. However, survivability is not determined by simple returns. It depends on whether the network’s security is maintained, the cost of attack remains sufficiently high, and decentralization is preserved.

To answer this question, we must understand how the two networks’ security models— Bitcoin’s PoW and Ethereum’s PoS—behave during stagnation. These two models operate on different philosophies and economic structures, and in a stagnant environment, their strengths and weaknesses become more pronounced. Below is a summary of the key characteristics of each security model.

✔ Strengths of Bitcoin’s PoW

Bitcoin’s PoW is based on physical resources (electricity and hardware), which makes the barrier to attack high and the network rules simple and predictable. Thanks to difficulty adjustment, the network has self-stabilizing properties that prevent it from halting even under extreme conditions.

• Very high physical attack cost — Real hardware and electricity are required, making attacks difficult.
• Difficulty adjustment prevents network death — If miners leave, difficulty drops and restores profitability for remaining miners.
• The network keeps running even during price stagnation — Blocks continue to be produced regardless of price.
• Rules are simple and predictable — Protocol changes are rare, supporting long-term stability.

✔ Weaknesses of Bitcoin’s PoW

However, PoW, while powerful, also has structural weaknesses. If price stagnation persists, a cycle of miner exit → difficulty drop → security weakening can emerge. The halving-driven reduction in block rewards also introduces uncertainty into Bitcoin’s long-term security model.

• Difficulty drops → security weakens — As hash power declines, the cost of attack falls.
• Mining centralization → weakened decentralization — Fewer miners mean higher market share for large miners.
• Block reward reduction (halving) → long-term security uncertainty — If the fee market is not large enough, maintaining security may become difficult.
• The fee market is not yet large enough — It is unclear whether fees alone can sustain security in the long run.

✔ Strengths of Ethereum’s PoS

Ethereum’s PoS has a structure where security strengthens as economic activity grows. Staking rewards, along with the L2, DeFi, and MEV ecosystems, support validator revenue, so as long as network activity persists, security can be maintained even during price stagnation.

• Staking rewards stabilize validator participation
• More network activity → higher fees → stronger security
• L2, DeFi, and MEV ecosystems help fund security costs
• Validator income can be sustained even if price stagnates

✔ Weaknesses of Ethereum’s PoS

Staking centralization (e.g., Lido) and complex economic incentives can make the system sensitive to external factors.

• Risk of staking centralization (Lido, etc.) — Power can concentrate in a few staking pools.
• Economic incentives are complex and sensitive to external conditions

Ultimately, BTC and ETH are strong in different ways and vulnerable in different ways. In a stagnant environment, these differences become even clearer. To properly evaluate Bitcoin’s long-term survivability, we must understand the structural weaknesses of its PoW model. PoW is a powerful security model, but certain vulnerabilities become more pronounced during prolonged stagnation. The following three elements are crucial when assessing Bitcoin’s long-term survival.

5-1) The claim that “Bitcoin’s security holds even if fees decline” is incomplete

Most of Bitcoin miners’ revenue comes from the block reward, with fees accounting for only about 5–10% on average. So even if fees decline, the network does not immediately become unstable. However, this does not mean that security is sufficiently maintained.

• Fees are not the core component of miner revenue.

In other words, the statement “security holds even if fees decline” is factually correct, but its meaning is limited.

5-2) Difficulty drops lower the cost of attack — and PoW’s self-stabilizing mechanism

Bitcoin’s security is determined by the absolute amount of hash power. When miners exit, Bitcoin achieves self-stabilization through difficulty reduction.

• When miners leave, block production slows down.
• The network detects this and automatically lowers difficulty.
• As difficulty drops, the profitability of remaining miners recovers.
• Once profitability recovers, mining becomes sustainable again.

Thanks to this mechanism, the network keeps running and does not die. However, the security level itself weakens in the process.

• Difficulty decreases → required hash power decreases → cost of attack decreases

Thus, PoW is a structure that “does not die,” but it is not always a structure that is “always strong.”

5-3) Difficulty drops lead to mining centralization and weaken decentralization

When the number of miners decreases, Bitcoin’s core value—decentralization—is weakened.

• Fewer miners → higher market share for large miners
• Higher market share → more concentrated hash power
• More concentrated hash power → higher risk of 51% attacks

In other words, difficulty adjustment keeps the network “running,” but decentralization and security strength can be weakened.

Conclusion: BTC and ETH are strong and vulnerable in different ways

MicroStrategy strengthens Bitcoin’s demand base and market confidence. Bitmine turns Ethereum into a yield-generating asset and reinforces network security through staking.

Bitcoin’s PoW is simple and self-stabilizing, but difficulty drops can weaken both security strength and decentralization. Ethereum’s PoS strengthens security as economic activity grows, but if price and activity decline, security can weaken more directly.

In the end, what matters is not which model is absolutely superior, but understanding in which environments each model is strong and in which environments it is vulnerable.

Younchan Jung
Researcher exploring structural shifts in AI, blockchain, and the on‑chain economy.

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