2 Reasons You May Want to Swap Coinbase for CONY

Over the past 12 months, Coinbase Global (NASDAQ: COIN) is up an impressive 58%. In 2025, it's already up 42%. However, those are just paper gains. If you are holding Coinbase Global, you would need to sell the stock in order to realize any income.

That's the problem that the YieldMax COIN Option Income Strategy ETF (NYSEMKT: CONY) attempts to solve. This ETF gives you access to some (but not all) of the upside potential of Coinbase stock, while simultaneously giving you a steady monthly income. Let's take a closer look at why you might want to swap Coinbase for CONY.

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What is CONY?

As the name of this ETF suggests, the primary goal here is to maximize yield. Using financial derivatives, the ETF transforms a non-yield-bearing asset (Coinbase stock) into a yield-bearing asset (the CONY ETF).

This ETF pays out a monthly distribution, which is measured in terms of a "distribution rate." The higher the distribution rate, the more income you receive on a regular basis. Within the offering prospectus, you can see exactly the timing, schedule, and amounts of prior distributions.

Right now, the distribution rate of the YieldMax COIN Option Income Strategy ETF is 72%. That's considerably higher than the distribution rates for other popular ETFs in the YieldMax family. For example, the YieldMax ETF tied to Tesla stock pays out a distribution rate of 63%. The YieldMax ETF tied to Microsoft stock pays out a distribution rate of 35%. And the YieldMax ETF tied to Netflix stock pays out a distribution rate of 30%.

Obviously, this yield-generating strategy requires a bit of financial alchemy to work properly. After all, money does not grow on trees. In this case, the YieldMax COIN Option Income Strategy ETF uses a synthetic covered call options strategy. The good news here is that all of this happens behind the scenes, so you don't need to know anything about options or options strategies.

In fact, it makes life simpler if you think about CONY as a "1-stock ETF." Just keep in mind, though, that you do not own the underlying Coinbase stock in the ETF. You only own access to the options position on Coinbase stock that is generating the monthly income.

Why should investors buy CONY instead of COIN?

Putting all this together, it's possible to come up with two good reasons why you might want to buy the YieldMax COIN Option Income Strategy ETF instead of Coinbase Global stock.

Image source: Getty Images.

The most important reason, of course, is the opportunity for monthly income (i.e., the monthly distribution). If you own the stock outright, you would not be receiving a monthly dividend or any other kind of cash payment.

The second big reason to buy the ETF rather than the stock is if you are neutral or moderately bullish on Coinbase. In other words, you're not expecting it to skyrocket in value anytime soon. You're quite content to generate monthly cash flow, while Coinbase stock trades within a fairly narrow range.

I can't emphasize this enough: You should only buy the ETF if you do not expect the price of Coinbase to skyrocket in value. Otherwise, you'd be giving up quite a bit of upside potential. You'd still be making money each month, but you'd potentially be leaving some money on the table.

Is CONY right for you?

The YieldMax ETF is generating yield with options. If you've never traded options before, I would highly recommend becoming at least moderately familiar with the payout chart of a covered call strategy. By referencing this payout chart, you should be able to recognize the scenarios when CONY will perform better than COIN.

At the end of the day, deciding to buy the YieldMax COIN Option Strategy ETF instead of Coinbase Global stock requires a trade-off. In exchange for sacrificing some of the upside potential of Coinbase, you are getting access to monthly cash flow. If Coinbase trades flat or only moderately higher, you stand to do better than if you were holding Coinbase stock.

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Dominic Basulto has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft, Netflix, and Tesla. The Motley Fool recommends Coinbase Global and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.