New to the cryptocurrency industry, should I choose Coinbase or Robinhood?

Original title: "Is Coinbase or Robinhood Stock the Better Bet?"
Author: Jack Inabinet, Bankless
Compiled by: Luccy, BlockBeats

##Editor’s note:

This article discusses Two companies with significant influence in the cryptocurrency space - Coinbase and Robinhood. Coinbase has won over a large number of U.S. retail and institutional investors thanks to its crypto-native background and deep roots in the industry over the years.

In contrast, although Robinhood is not as good as Coinbase in terms of cryptocurrency trading volume, it still enjoys high popularity among U.S. retail traders and has strong compliance capabilities. Robinhood has actively entered the encryption market, developed non-custodial wallets, and plans to acquire Bitstamp, an established European encryption exchange, to further expand its influence in the encryption field.

This article provides an in-depth analysis of the unique advantages and potential risks of the two companies in the cryptocurrency market, providing investors with valuable reference information. BlockBeasts compiled the original text as follows:

All the time , Coinbase stock are all obvious choices for investors to get exposure to cryptocurrencies through a public company, but now there's another company that's challenging that status.

On Thursday, Robinhood announced that it would spend $200 million to acquire Bitstamp, which is the oldest cryptocurrency exchange still operating and holds valid licenses to operate in more than 50 countries.

So, should you increase your holdings of COIN stocks or HOOD stocks?

Today, we’ll explore the differences between Coinbase and Robinhood to see why investors have confidence in both stocks.

REASONS TO SUPPORT COIN

Coinbase is often considered the most reputable cryptocurrency exchange, an honor that has allowed it to sell retail and institutional cryptocurrencies in the United States during its 12 years of existence. Deep connections are made among enthusiasts.

Centralized cryptocurrency exchanges often provide limited insight into their financial health; however, as a company listed on the U.S. stock market, Coinbase is required to undergo rigorous audits and submit reports to the SEC, thereby reducing the risk of customer funds being Possibility of appropriation.

While the primary function of most exchanges is trading, Coinbase is more than a simple market; it was one of the first CEX companies to establish an on-chain presence and played a role in infrastructure development Important role, launched its own wallet and Ethereum L2 Base!

Since Ethereum implemented EIP -4844 in the Dencun upgrade in March, the cost of L2 publishing data has been reduced by several orders of magnitude, and Base’s on-chain operating profit margin has reached almost 100%, which means that on Base Nearly all transaction fees paid go directly into Coinbase revenue.

Although Base's revenue has dropped significantly since its peak in late March, the network remains the second largest L2 by TVL and generates more profit than any other major L2, according to L2 BEAT , often netting over $100,000 a day.

Source: Dune

In addition to its on-chain infrastructure, Coinbase also Provides a complete set of custody tools, provides advanced staking services and an ETH liquid pledge token, as well as institutional-grade custody solutions.

Coinbase Custody is widely regarded as the premier digital asset custody provider and serves 8 of the 11 spot BTC ETFs in the United States, including Grayscale’s G BTC and BlackRock’s IBIT (both of which are based on Products with the largest assets under management calculation). This arrangement allows Coinbase to earn custody fees from the assets they manage, in addition to earning trading fees from creation and redemption, which will provide the company with an opportunity if the spot cryptocurrency ETF continues to gain traction among traditional market participants. Provide strong revenue drivers.

Crypto payments have yet to achieve mainstream adoption, but the Coinbase team has developed the infrastructure through its Commerce platform to enable merchants to accept hundreds of crypto assets as goods and services To pay, go directly into their self-hosted crypto wallet.

If the public’s willingness to hold crypto assets increases and they recognize the benefits of self-custody technology, it will help Coinbase generate more revenue through the platform.

Coinbase also caters to the needs of international users who are not subject to U.S. financial regulations and can trade futures on various crypto assets through the exchange; if the crypto industry receives positive regulatory clarity, these services can Easily expands to US platform - currently only offers BTC and ETH futures.

Additionally, holders of COIN stock may earn a certain amount from the success of the Coinbase Ventures portfolio, which contains many lucrative private market opportunities that are not accessible to retail and outside investors.

REASONS FOR HOOD

While Coinbase has the upper hand in terms of the volume of cryptocurrency trades it handles, Robinhood remains the undisputed champion among retail traders in the United States.

Although the total amount of assets under custody on Robinhood's platform is less than that of Coinbase, even when stocks, options, cash and cryptocurrency balances are all combined, Robinhood had more monthly active users than Coinbase in the first quarter of 2024 70%, which highlights the exchange’s popularity among retail traders.

There is no doubt that Robinhood’s biggest advantage is its compliance; as a broker, Robinhood is regulated by the SEC. If the SEC creates a new digital asset securities classification, and trading is limited to registered brokers, then Robinhood Will be expected to become the dominant cryptocurrency exchange.

While Coinbase is clearly the more crypto-native company and has attracted a wealth of talent with strong industry connections, there’s been little besides regulatory uncertainty Could prevent Robinhood from creating its own crypto app.

Robinhood has developed its own proprietary non-custodial wallet solution and recently launched an integration that enables users to purchase cryptocurrencies directly on the Uniswap mobile app with funds from their Robinhood Connect account.

With its proposed acquisition of Bitstamp (although it may still be blocked by regulators), Robinhood acknowledged the growth potential of its crypto business despite the ongoing legal battle with the SEC and confirmed that it will participate in the zone to the best of its ability. Blockchain technology.

Bitstamp’s 4 million active users are primarily from Europe, making it a very attractive demographic for its U.S.-centric buyers, and the acquisition also includes Bitstamp’s core staking and lending products, Allowing Robinhood to better compete with the services of cryptocurrency CEX and showing it can catch up with crypto-native rivals by buying crypto technology developed by other companies.

Key Points

For crypto investors who are already bullish on COIN, it won’t be difficult to be equally bullish on HOOD, considering the company appears to be aggressively entering the crypto market and has already won over U.S. retail investors favor. If the industry craze resumes, these investors are likely to enter the cryptocurrency space because of the convenient buying and custody solutions provided by Robinhood.

Coinbase, on the other hand, has a proven crypto performance and significant institutional adoption, which is reflected in the preference of spot crypto ETF issuers for its services.

Each of these two listed exchanges has its own unique advantages and disadvantages. Although Robinhood is currently at a disadvantage in this competition, Coinbase’s dominant position is not unbreakable, especially in the future of stricter crypto finance. in a regulatory environment.

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