Is Bitcoin’s Supply Cap Just a Mirage? The Truth Behind VanEck’s Marketing

• VanEck misrepresents Bitcoin’s supply cap, omitting that it’s conditional on transaction fees, which are currently minimal.
• Bitcoin’s reliance on issuance and underwhelming Lightning Network adoption contradict claims of a strict supply limit.
• Unlike Bitcoin, Ethereum’s reduced issuance supports its position as a valuable digital asset in the market.

VanEck’s marketing claims that Bitcoin’s fixed supply sets it apart, especially since Ethereum doesn’t have a similar limit. However, this report misrepresents how Bitcoin’s supply actually works. Investors deserve clarity, yet the promotional materials fail to mention that the 21 million supply cap is conditional on transaction fees. Currently, transaction fees contribute only 1-2% of miners’ revenue, making this a critical omission.

$ETH's marketing team, your immediate attention is required.

VanEck is claiming they are informing their customers about how BTC's supply cap is conditional, but their marketing material perpetuates the idea the 21M cap is unconditional and that it is a key differentiator… https://t.co/LoSKRk27Fo pic.twitter.com/jUtgbHZiE1

— AdrianoFeria.eth 🦇🔊 🛡️ (@AdrianoFeria) November 2, 2024

The Conditional Nature of Bitcoin’s Supply Cap

Adriano Feria highlights a glaring issue with VanEck’s promotional content. It implies that the 21 million supply cap is absolute. However, the reality is far more complex. The supply cap can only be maintained if transaction fees increase significantly. 

This lack of openness is deceptive and may cause confusion for prospective investors. Furthermore, the marketing materials fail to mention that 98–99% of miners’ income comes from the issue subsidy of Bitcoin.

Besides, VanEck’s claims about Bitcoin’s finite supply are akin to advertising a non-stop flight while failing to mention that most of the fuel has been depleted. This analogy underscores the misleading nature of their marketing approach. BTC’s dependency on issuance remains high. 

Consequently, the scaling solution, the Lightning Network, has struggled to gain traction, with less than 0.025% of BTC operating on it. This reality contradicts the notion of Bitcoin as a digital currency with a strict supply limit.

The Comparison with Ethereum

Moreover, BTC and ETH are not merely digital currencies; they compete as money-like assets. Ethereum has achieved net deflationary issuance since the Merge, creating an environment that supports native yield. 

This starkly contrasts with Bitcoin’s approach, which continues to rely heavily on issuance. Additionally, Ethereum’s framework extends beyond currency, positioning Ether as its effective native digital currency.

Investors must be better informed about the dynamics that influence the value propositions of both BTC and ETH. Transparency in marketing is essential for fostering informed investment decisions. The Bitcoin community can guarantee a more informed investor base by making these important points clear.