DigiTalk Podcast EP58 Recap - Is ETH Losing Its #2 Spot to Stablecoin?

Crypto is shifting from price to utility, and stablecoins are growing on real usage.
Join us as we explore what’s next for ETH.

Introductions

Suede Labs

Suede Labs is a builder focused on creator infrastructure, especially around music, digital ownership, and IP monetization. In this session, Johnny Suede explained that the team has been expanding across multiple chains, including Avalanche, while also developing tools that support agentic buying and selling, virtual instruments, and easier onboarding for musicians. Their broader mission is to help creators protect their intellectual property and monetize their work more effectively across ecosystems.

CoinAnk

CoinAnk is a crypto derivatives data and analytics platform serving a large global user base across regions such as Europe, the United States, and Asia. Henry described the platform as tracking massive daily trading volume and open interest while increasingly integrating AI into its indicators, including liquidation maps and charting tools. The platform is positioned as a market intelligence product that helps traders access daily analysis, statistics, and actionable market insights.

Q1. Lately, we’re seeing more people talk about stablecoins as the “real growth story” in crypto — not because of price, but because of usage, and now increasingly supported by policy moves like the GENIUS Act. Do you think this marks a real shift toward valuing utility over speculation, or is it still cyclical?

Suede Labs

Johnny Suede viewed stablecoins as a meaningful step forward because they represent a kind of regulatory compromise. In his view, they are not fully aligned with the original censorship-resistant ethos of crypto, since issuers like Tether and Circle can freeze assets, but that same feature also makes them more practical in a world increasingly concerned with compliance, safety, and regulatory oversight.

He framed stablecoins as a useful middle ground rather than a purely ideological crypto asset. For him, this makes them important infrastructure for broader adoption, especially because they offer a built-in protective layer against harmful or illicit activity without requiring what he sees as overly heavy-handed external regulation. So while they may differ from Bitcoin or Ethereum philosophically, he sees their utility as very real.

CoinAnk

Henry argued that this is a real structural shift, not just another passing cycle. He said stablecoins are increasingly behaving like digital dollars, and policy developments such as the GENIUS Act suggest that governments and institutions are beginning to recognize that they are here to stay.

He also emphasized that stablecoin usage is now expanding beyond the traditional crypto-native hype cycle. In his view, speculation is not disappearing, but utility is finally earning a legitimate place in the market. That makes stablecoins different from earlier narratives that were driven mostly by price momentum rather than genuine use.

2. Stablecoins don’t need a bull market to grow — they expand with payments, trading, and capital movement, and now also regulatory clarity. Does that give them a structural advantage over assets like ETH that rely more on market sentiment?

CoinAnk

Henry’s answer was clear: yes, stablecoins have a structural advantage in this respect. He argued that stablecoins can keep growing whether Bitcoin and the wider market are rising or falling because their role is tied to payments, treasury management, and cross-border transfers rather than speculative upside alone.

By contrast, he suggested that ETH still depends more heavily on sentiment and price appreciation. In his view, stablecoins create a baseline level of activity that is more resilient than purely speculative demand, which gives them a stronger structural foundation in uncertain markets.

Suede Labs

Johnny Suede agreed that stablecoins create an opportunity for growth even during downtrends. At the same time, he made an important distinction: for the average user, stablecoins are more of a tool than an investable asset, since people are generally not buying them for upside in the same way they buy ETH or BTC.

He described them as a safe haven inside crypto rails rather than a direct speculative opportunity. That difference matters because, in his view, it reinforces the idea that cryptocurrencies and stablecoins should not be treated as the same category. They may coexist in the same ecosystem, but they serve different purposes in terms of valuation, regulation, and user expectations.

3. There’s a narrative forming that ETH could lose its #2 position in the next few years. Do you take that seriously, or is it just a reflection of short-term fear in the market?

Suede Labs

Johnny Suede said that if the discussion is purely about market cap, then yes, it is possible. But he was careful to separate market cap from deeper questions of value and importance. He argued that ETH and stablecoins are difficult to compare directly because they exist for very different reasons and solve different problems.

He also pointed out that Ethereum remains the foundational layer for decentralized applications, while stablecoins are primarily valuable because they provide predictable pricing and reduce exposure to volatility. In his view, stablecoins could overtake ETH in market cap under certain conditions, but that would not necessarily mean they have replaced Ethereum’s underlying relevance or influence within crypto.

CoinAnk

Henry said he takes the idea seriously in the sense that markets are always competitive, but he does not think it is likely in the near term. He suggested that much of the current narrative is being driven by short-term weakness in ETH price action, ETF-related disappointment, and temporary outflows rather than a true collapse in Ethereum’s long-term position.

He stressed that Ethereum still benefits from powerful network effects in DeFi, stablecoins, and real-world assets. He also made the important point that many stablecoins are issued on Ethereum or its layer-2 ecosystem, meaning Ethereum still plays a central role even when stablecoin usage expands. For him, Ethereum captures value in ways that may be less obvious than price performance alone.

4. Ethereum still dominates DeFi, RWA, and even stablecoin issuance itself. So if stablecoins win, does Ethereum actually lose — or does it just capture value in a less obvious way?

Suede Labs

Johnny Suede argued that Ethereum still benefits when stablecoins grow because any increase in usage on top of crypto rails ultimately supports the underlying chain. Whether the activity comes from dApps, payments, or tokenized instruments, more participation in the ecosystem increases the relevance of the base layer.

He also broadened the point beyond Ethereum itself, saying that stablecoins help bring new users and institutions into crypto who might not otherwise participate because of volatility. Once that interest enters the ecosystem, it can translate into further investment and activity across chains. In that sense, he sees stablecoins as a net positive for Ethereum and for crypto infrastructure more broadly.

CoinAnk

Henry strongly supported the idea that Ethereum captures value in a less direct way. He said that although stablecoins may not immediately translate into obvious price appreciation for ETH, they still reinforce Ethereum’s role as a settlement and infrastructure layer.

His answer suggested that Ethereum’s importance is embedded in the way the system works. If users are moving USDC, settling payments, or interacting with stablecoin-based applications on Ethereum and its scaling ecosystem, then Ethereum remains essential even if the market narrative temporarily shifts toward stablecoins themselves. In his view, the value is real, but it is not always reflected in a simple headline metric.

5. If ETH drops below key psychological levels, it tends to trigger strong reactions across the market. How much do you think price still drives narrative, versus fundamentals actually shaping long-term positioning?

CoinAnk

Henry acknowledged that in the short term, price still drives narrative heavily, especially when ETH breaks important psychological levels. That kind of move tends to shape sentiment quickly and can dominate market conversation even when the underlying fundamentals remain intact.

At the same time, he argued that over the long term, fundamentals matter more. He pointed to real adoption drivers such as stablecoins, real-world assets, and staking as the factors that should ultimately matter more than short-term price swings. His view was that narrative may follow price in the moment, but long-term positioning will be decided by durable usage and demand structure.

conclusion

Overall, the discussion suggested that stablecoins are no longer just a defensive tool in crypto, but a growing layer of real utility supported by payments, capital movement, and clearer regulation. At the same time, both speakers made it clear that this does not automatically weaken Ethereum, since much of that stablecoin growth still depends on Ethereum’s infrastructure and broader network effects.

In that sense, the real question is not simply whether stablecoins can challenge ETH by market cap, but whether the market is starting to value infrastructure and utility differently from before.