By Paul R. La Monica

Bitcoin is back after a rough patch, surging above $110,000. Yet, some stocks in the digital assets universe aren't all riding the wave as well as others. A notable example is Coinbase and Robinhood.

Shares of the two retail brokerage firms are both up this year. But Robinhood has soared more than 75% this year and Coinbase has gained just 8%. That's despite Coinbase's addition to the S&P 500 last week, a watershed moment for the crypto industry. Robinhood isn't in the index.

Robinhood is arguably getting more of a boost from the very obvious rebound in riskier assets in the past month or so. Although a big player in crypto, the trading platform also generates a significant chunk of its transaction revenue from options and stocks.

And Coinbase has taken a few serious whacks this month. Its first-quarter sales missed forecasts. Then pile on the fallout from a cyberattack and a lingering investigation by the Securities and Exchange Commission.

Both stocks, though, are basking in Wall Street's validation of cryptocurrency as a legitimate asset class -- Coinbase's initiation into the S&P 500 club -- and the Trump administration's embrace of the industry.

Trump Media & Technology Group, the president's media company, plans to raise $2.5 billion to buy Bitcoin. (Trump's shares, a more than 52% stake, are in a revocable trust controlled by the president's son, Donald Jr.) And Vice President JD Vance is set to speak at the Bitcoin Conference this week in Las Vegas.

Coinbase could also get more lift from the coming initial public offering of Circle internet Group, which provides Stablecoin, a crypto backed by a specific asset, typically the U.S. dollar or gold. Circle issues USDC, which is pegged to the greenback.

The brokerage has both an equity stake in and partnership with Circle, which has disclosed in a regulatory filing that it hopes to price its stock between $24 and $26 a share. That would potentially value Circle at about $6.7 billion.

So which stock is the better buy then -- Coinbase or Robinhood?

Neither is cheap, with both trading around 50 times earnings estimates for this year. Analysts expect Coinbase's earnings to grow more rapidly though, with Wall Street forecasting a 44% jump in annual profits next year versus a 22% gain for Robinhood.

And both are busy making deals to cement their industry-leading positions.

Coinbase plans to acquire crypto options company Deribit. And Robinhood is buying Canadian crypto trading platform WonderFi and is closing its deal for brokerage firm Bitstamp.

There is a lot of competition in the brokerage world.

This month alone, e Toro went public as did Galaxy Digital, the investment firm run by longtime Bitcoin bull Michael Novogratz.

But it's really a two-horse race because of sheer size: Coinbase has a market valuation of nearly $70 billion and Robinhood is worth almost $60 billion.

So again, which is the better buy? Like anything, it depends.

The best measure might be pure play exposure to crypto. And for that, Coinbase is the better option.

Write to Paul R. La Monica at paul.lamonica@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 27, 2025 14:53 ET (18:53 GMT)

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