Stablecoin vs. Bitcoin: what's the difference?

October 2025 by Koywe Team

The crypto world is huge, made up of many different asset types, and it's easy to get confused. If you're new to these terms, you might be wondering what actually separates Bitcoin from a stablecoin.

So here's the first spoiler: one is a type of cryptocurrency, and the other is the very first cryptocurrency, the most popular one. But let's not get ahead of ourselves, let's go step by step.

Let's talk crypto

To start, we need to understand that cryptocurrencies are part of a bigger system: crypto assets.

Types of crypto assets

There are several types of digital assets. Here are some of the most well known:

• Cryptocurrencies

Decentralized digital coins, meaning they aren't controlled or backed by any bank. They're created through cryptography and blockchain.

• Security tokens

Unlike the ones above, security tokens aren't used as a means of payment. They can represent financial value, such as stocks or bonds.

• Stable cryptocurrencies (stablecoins)

These coins are generally backed by "real world" assets, like fiat currencies such as the US dollar or the euro. Check out our article to learn more about how they work and see some examples.

• Utility tokens

Their purpose isn't to store value or act as a medium of exchange. Holders can use them to access features, services, or certain functions within a blockchain network or dApp.

How cryptocurrencies work

We mentioned that cryptocurrencies run on cryptography and blockchain, but what does that actually mean?

Cryptography is used to encode information so only authorized people can access it. Blockchain, meanwhile, is a system where information is organized into blocks and distributed across multiple network participants, which makes it a secure and transparent way to store data.

Put both together, and you get virtual currencies with a solid backing system. So who came up with all of this?

The first cryptocurrency

Now let's answer that question: what is Bitcoin?

A common, but mistaken, idea is that Bitcoin and cryptocurrency are the same thing. It's a bit like calling every tissue a Kleenex. People just getting familiar with this world often start out with that assumption.

In reality, though, Bitcoin is the first cryptocurrency ever created, and by far the most popular.

A mysterious origin

Bitcoin got its start in 2008, when its "creator," Satoshi Nakamoto, published Bitcoin: a peer-to-peer electronic cash system. Here's the interesting part: even today, no one really knows who that person is, or whether it was a group of people all along.

Either way, by 2009 it was already up and running. Its growth was gradual but steady, reaching an all-time high near $120,000 in 2025, according to data from Bankrate.

Stable cryptocurrencies: stablecoins

Within this world of digital assets, a new need came up: cryptocurrencies were volatile, and that made the general public uneasy. The answer came in the form of a new kind of cryptocurrency, one that was stable and opened the door to different uses. That's how stablecoins were born.

What are stablecoins?

Stablecoins are a type of cryptocurrency built to keep a constant, stable price. While they can be backed in different ways, the most popular ones tie their value to real currencies, like the US dollar or the euro.

The story of Tether (USDT)

Just like Bitcoin is the best known cryptocurrency, Tether (USDT) is the most popular stablecoin.

It was originally called Realcoin. The idea came about when Brock Pierce, Reeve Collins, and Craig Sellars set out to create a "real dollar" on the blockchain.

Key differences

So, was the title just clickbait? A little, but hopefully it answered your question. Now you know that stablecoins and Bitcoin are more like cousins than rivals. That said, here's what actually sets a stable cryptocurrency apart from a regular one.

Volatility

Cryptocurrency

• High, and driven by supply and demand.

Stablecoin

• Low, since it's designed to back its value with real assets. In the case of fiat backed coins, that usually means a 1:1 peg.

Main uses

Cryptocurrency

• Has become a tool for speculative investment.
• Works as a store of value.

Stablecoin

• Has become a stable way to pay in e-commerce and B2B.
• Used for fast, low cost international transfers and remittances.

Popular examples

Cryptocurrency

1. Bitcoin
2. Ethereum

Stablecoin

1. USDT (Tether)
2. USDC (Circle)
3. DAI