Bitcoin, ether and stablecoins

Three different things under one word

Bitcoin is a scarcity asset: limited supply and the longest history. Ether is the fuel for a programmable platform. A stablecoin is a means of payment pegged to a single currency, and its value is not even meant to rise. Three different purposes, three different risk profiles.

Why bitcoin is in a different position

Bitcoin is the reference point of the crypto market: the deepest market, the longest history and the clearest rule on supply. That does not make it safe (its falls in value have been in the range of more than 80 percent), but it does make it the only crypto-asset whose structure you can assess without a view on the success of a single team or product.

Other crypto-assets require a judgment on whether the network will still be used years from now. That is a harder question than it feels in a rising market. Bitcoin is the oldest and most liquid crypto-asset, and many people get to know crypto-assets through it.

Row-by-row comparison

Open a row to see the difference

A stablecoin is not a euro in an account

A stablecoin is a token pegged to an official currency. It is the backbone of trading: most crypto pairs are priced in stablecoins, because they let you move from one crypto to another without going through a bank.

The peg is not automatic, though. It holds only as long as the issuer has reserves and the right of redemption works. In the EU, MiCA sets strict requirements for this: a full reserve and redemption at face value. An algorithmic stablecoin, which maintains its peg with a mechanism alone and no reserve, is a different product and has historically failed.

This content is for information purposes only and should not be construed as investment advice or a recommendation. Investing always involves the risk of losing capital. The value of financial instruments and investments can go up or down, and past performance is no guarantee of future returns.