Financial services giant Fidelity predicts that stablecoin adoption could cause further divergence between the two largest crypto assets. According to a new report from Fidelity, Ethereum $2,324.80 stablecoin usage on ETH distinguishes it from its competitors in the Tier-1 sector and Bitcoin 
$56,474.79will separate from.
Technological Disintegration
The report states that Bitcoin and Ethereum will continue to diverge technologically in the future. It is stated that this divergence will lead to different use cases and increase the potential to add more diversity to portfolios. In particular, the rise of stablecoins on Ethereum shows that this platform offers more benefits in the sector.
Usage Differences
Fidelity says one of the key differences between the two chains is that Ethereum is used for asset transfers, while Bitcoin is more likely to be held as a long-term investment. It says that in 2023, $3.4 trillion worth of Bitcoin, $1.4 trillion in Ether, and $3.5 trillion in Ethereum layer-1 stablecoins were transferred. This data supports Bitcoin’s store of value thesis and suggests that investors generally view Bitcoin as a long-term hedge.
Advantage of Ethereum
The report also states that Ethereum has a major advantage over other smart contract platforms. It notes that Ethereum’s dominant network effects make it difficult for other smart contract platforms to catch up. Ethereum’s large user base and development community are seen as a significant part of this advantage.
Ethereum’s trading value at the time of writing is $2,332, while Bitcoin’s value is stated as $57,075. The two crypto assets can play complementary roles in portfolios with different use cases and investment strategies.
As a result, the rise of stablecoins and the benefits offered by Ethereum could differentiate this crypto asset from its competitors and Bitcoin. Bitcoin’s store of value thesis is based on investors’ trust in this asset as a long-term inflation hedge. Ethereum stands out with its advantages over large network effects and smart contract platforms. The two assets can offer investors a variety of opportunities by playing different and complementary roles in portfolios.
Disclaimer: The information contained in this article does not contain investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
