Coinbase vs. Bitcoin: Why the Crypto Stock Is a Better Buy

Bitcoin (CRYPTO: BTC) remains the king of crypto, despite recent losses. The first and most established cryptocurrency accounts for almost 60% of the total crypto market cap, making it a popular -- and less risky -- choice for institutional and retail investors alike. However, buying Bitcoin is not the only way to get exposure to the digital asset world.

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Crypto stocks are different from cryptos, and crypto stock Coinbase (NASDAQ: COIN) may be better placed to reap the rewards from increased blockchain adoption. That's because cryptocurrency is still a relatively new industry that could evolve in several directions. Like Bitcoin, the popular crypto exchange will benefit from any recovery in cryptocurrency prices and increased institutional adoption. Unlike Bitcoin, it will also benefit from growth in stablecoins and other real-world uses of blockchain technology. Read on to find out why Coinbase is a better investment than Bitcoin.

Stablecoin growth helps Coinbase. Bitcoin? Not so much.

Stablecoins -- crypto versions of traditional currencies that are pegged to the latter's value -- could change the way money works. They are the most tangible use of blockchain technology that I've seen in years of writing about the industry. They are already being used as a low-cost way to move money internationally, and people in developing economies are also using them as a way to save.

Coinbase earned $1.35 billion in stablecoin revenue in 2025, which was about 20% of its annual net revenue of $6.88 billion. Coinbase benefits from a surge in stablecoin usage through its partnership with Circle Internet Group (NYSE: CRCL). Circle issues the stablecoin USD Coin (USDC) and keeps funds in reserve for each USDC in circulation. Those funds earn interest, which it shares with Coinbase.

Bitcoin is another story. Payments and global money transfers were originally seen as a key potential growth area, and stablecoins are eroding this use case. It makes sense. I'd certainly rather make a money transfer in a dollar-pegged stablecoin than a crypto that could lose 10% of its value overnight.

Coinbase holds a winning crypto hand

Coinbase and Bitcoin have lost 8% and 10% year to date, respectively, as I write this, but it looks like both could be turning a corner price-wise. Bitcoin recently reached $77,000, its highest price since early February. It is too early to say whether its price has actually bottomed, but its recent gains are a good sign.

If investor confidence returns, Coinbase's trading revenue will likely pick up. Any recovery would also mean more investors buying shares of crypto exchange-traded funds (ETFs), many of which use Coinbase's custody services. Coinbase now also offers non-crypto trading. That means it can still pull in sizable trading fees even if crypto prices slump again.

That's not all. Coinbase also has fingers in the decentralized finance (DeFi) and tokenization pies through its Base blockchain. DeFi is a way to save, borrow, and lend on the blockchain without needing banks or other middlemen, while tokenization records ownership of assets on-chain. DeFi can be risky, but the amount of funds on DeFi platforms has soared in recent years. Base is already among the top 10 blockchains with more than $4.5 billion in funds on its ecosystem.

Coinbase could still face regulatory and competitive headwinds. However, where Bitcoin is the king of crypto, Coinbase is emerging as a blockchain leader. As the industry matures, that could help it to outperform Bitcoin.

Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.