Understand the key differences between stablecoins and Bitcoin across volatility, purpose, supply, trust, and real-world use.
When it comes to digital assets, stablecoins and Bitcoin have been consolidating themselves as protagonists within this ecosystem, each with specific proposals and roles. While Bitcoin is often associated with a store of value and investment, stablecoins emerge as digital instruments focused on price stability and operational efficiency.
In practice, both are already used for diverse purposes, ranging from investment and treasury management to FX arbitrage and payments. Still, it is common for questions to arise about the characteristics, limitations, and risks of each, and about in which contexts it makes sense to use one or the other.
In this guide, we will analyze the differences between these two approaches to cryptocurrencies and help you understand which may be more suitable for different needs and objectives. The following aspects will be explored:
The most fundamental difference between Bitcoin and stablecoins lies in how their prices behave in the market. This characteristic defines not only their value, but also their practical applications in the crypto ecosystem.
Bitcoin is characterized by its notable volatility, with prices that can rise or fall by thousands of dollars in a single day. Studies show that Bitcoin’s volatility is approximately eight times higher than that of traditional stocks, which creates both opportunities and significant risks for investors.
This price instability occurs due to several interconnected factors:
While these characteristics make Bitcoin attractive to traders, they make it unsuitable for everyday use. In 2025, Bitcoin continued to register daily trading volumes in the tens of billions of dollars, reinforcing its relevance as an investment asset despite volatility.
In contrast, stablecoins are designed specifically to maintain price stability. They achieve this through a link to more stable assets, usually fiat currencies such as the US dollar or the euro. For example, stablecoins like USDT (Tether) and USDC (USD Coin) consistently maintain values close to USD 1.00.
This stability is achieved mainly through three mechanisms:
Stablecoins exhibit near-zero volatility, with prices fluctuating within a narrow range around USD 1.00. This characteristic makes them ideal for everyday transactions and international remittances. In October 2025, stablecoins even surpassed Bitcoin in daily trading volume, reinforcing their role as the main source of liquidity in the crypto market.
This stability has therefore transformed stablecoins into transactional tools rather than speculative assets, facilitating exchanges, payments, and remittances without exposure to FX risks.
Cryptocurrencies, such as stablecoins and Bitcoin, have become part of our financial system, but with very distinct purposes.
Bitcoin evolved from its initial conception as a payment method into a long-term store-of-value asset. Often called “digital gold,” it functions as protection against inflation and as sovereign money. Its value derives mainly from digital scarcity, with only 21 million coins to be mined, mimicking the economic principle that rarity creates value. In addition, characteristics such as decentralization, security, and the trust established over its existence reinforce its credibility as a long-term asset.
Stablecoins, on the other hand, were created specifically to solve the problem of volatility in the crypto ecosystem. They represent currencies such as the dollar and the euro in digital form, facilitating transfers with greater speed and security. Stablecoin transactions occur on blockchain networks that operate continuously, with settlement typically occurring within minutes, regardless of time zones or holidays. In addition, these stable currencies serve as settlement assets, on/off-ramp tools, and liquidity bases for DeFi protocols.
International remittances perfectly illustrate the potential of stablecoins. While traditional transfers cost approximately 6.62% of the amount sent, transfers using stablecoins generally cost cents and are completed in minutes, not days.
A fundamental contrast between these cryptocurrencies lies in how they manage their total supply, directly impacting their economic behavior and utility.
Bitcoin has a hard cap of 21 million units, established by Satoshi Nakamoto in the original source code. This maximum ceiling is achieved through the “halving” process, where the reward for mining new blocks is reduced by half approximately every four years. This mechanism gradually decreases the rate of new coin creation, and it is estimated that the last Bitcoin will be mined around 2140.
This programmed scarcity is central to Bitcoin’s value proposition, making it similar to assets such as gold and real estate. The increasing difficulty of production contributes to its appreciation as a digital store of value.
In contrast, stablecoins have a flexible supply that expands and contracts according to market demand. When users want to acquire stablecoins, new units are produced (minted); when they sell them, tokens are “burned,” being removed from circulation.
This lifecycle follows four essential stages:
Dollar-backed stablecoins maintain equivalent reserves for each token issued. For each USDC or USDT in circulation, there is theoretically one US dollar (or equivalent) held in reserve. These reserves are typically held in segregated, bankruptcy-remote accounts, subject to regular audits.
Stability is maintained by two main mechanisms: institutional users can redeem stablecoins directly with issuers at a fixed 1:1 rate, and market arbitrageurs balance price deviations by buying when below the peg and selling when above.
The technical architecture of Bitcoin and stablecoins determines how we trust, control, and use these digital assets in different financial contexts.
Bitcoin operates through a “trustless” system, where users do not need to trust third parties for the network to function. This fundamental concept means that the system achieves consensus primarily through code, asymmetric cryptography, and the blockchain’s own protocols, without intermediaries. The Bitcoin network is virtually impossible to shut down because it has no central point of failure, which ensures censorship resistance and transaction permanence.
By contrast, stablecoins rely heavily on centralized entities that manage their reserves. Stablecoins backed by traditional currencies, such as USDT and USDC, can be vulnerable to runs, which occur when many users try to redeem or sell the stablecoin at the same time out of fear that reserves are insufficient or cannot be converted into cash quickly. This type of movement can put pressure on the backing and can even cause the stablecoin to temporarily lose its 1:1 peg to the dollar, although it presents a lower risk of occurrence.
A significant advantage of stablecoins is their ability to operate across multiple blockchains simultaneously. USDT, USDC, and DAI circulate on networks such as Ethereum, Solana, Tron, and Polygon, allowing businesses to choose faster or cheaper networks as needed. However, this interoperability is still limited, and stablecoins can show meaningful differences in price and liquidity across blockchains.
The choice between Bitcoin and stablecoins fundamentally depends on your financial objectives. While Bitcoin has consolidated itself as a digital store of value with significant appreciation potential due to its limited supply, stablecoins offer the practicality and security needed for everyday transactions without exposure to volatility.
In addition, this distinction does not mean these cryptocurrencies compete directly. On the contrary, they complement each other within the crypto ecosystem. Bitcoin continues to attract investors seeking protection against inflation and monetary independence, albeit with higher risk. In parallel, stablecoins have revolutionized the movement of global capital, enabling fast and inexpensive transfers that were previously impossible through traditional banking systems.
Finally, both Bitcoin and stablecoins represent fundamental innovations in how we think about money and value. The former shows us how scarcity can create a new asset class, while the latter brings us closer to a truly global and accessible financial system. Together, these technologies will continue transforming our relationship with money in the coming years, each fulfilling its specific role in the digital financial ecosystem.
Conduit combines stablecoins, liquidity networks, and integration with local rails to make international payments more predictable, transparent, and efficient. If you are looking to reduce costs, simplify operations, and access local currencies with greater agility, talk to our team and see how Conduit can support your international operations.
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