Altcoins like Ethereum lay the groundwork for a decentralized finance (DeFi) ecosystem that will bring financial inclusion to the entire world. On the Ethereum network, for example, users can access loan funds and even earn a passive income by investing in DeFi projects. They provide a pathway for crypto projects and blockchain systems to spread across other institutions such as healthcare and real estate, among many others.

Stablecoins combine the advantages of cryptocurrencies and traditional currencies. This means you can benefit from the privacy and security features of digital currencies, as well as the price stability of fiat currencies. This invariably means that traders can use stablecoins for transactions without fear of volatility. It is important to note, however, that stablecoins are linked to an external asset.

Altcoins (alternative coins) are cryptocurrencies other than Bitcoin, such as Ethereum, Solana, and Cardano. They often aim to improve upon Bitcoin’s technology, offering features like smart contracts, faster transactions, or lower fees. Their prices are highly volatile, driven by market demand and speculation.

Stablecoins, like Tether (USDT) and USD Coin (USDC), are pegged to stable assets such as fiat currencies (e.g., USD) or commodities (e.g., gold). Their value remains relatively constant, minimizing volatility. They are widely used for trading, remittances, and as a safe haven during crypto market fluctuations.

While altcoins are riskier with higher profit potential, stablecoins provide stability and are ideal for hedging or quick transactions without price swings.