Crypto-focused fintechs have gained momentum in the backdrop of easing regulatory control to accelerate crypto adoption (including institutional) as well as integrating artificial intelligence (AI) and blockchain technology. In this context, let’s find out which of these two companies is better poised, Coinbase (COIN Quick QuoteCOIN - Free Report) or Block Inc. (XYZ Quick QuoteXYZ - Free Report) . 

Stablecoins, which bridge the gap between traditional finance and the crypto space, are gaining importance in shaping the digital financial system. In fact, major banks are also exploring their own stablecoin initiatives. 

Also, major players are pursuing mergers and acquisitions to consolidate their market positions. There were reports about Stablecoin issuer Circle mulling over a sale either to COIN or Ripple. Recently, COIN agreed to buy Derbit to expand its derivatives business.

Yet, cyber threats remain a challenge. 

But as an investment option, which stock is more attractive? Let’s closely look at the fundamentals of these stocks. 

Factors to Consider for COIN

America’s largest registered cryptocurrency exchange is well-positioned to capitalize on heightened crypto market volatility and rising asset prices. Coinbase is also poised to benefit from President Trump’s pro-crypto outlook and emphasis on regulatory clarity. With 83% of its total revenues coming from the United States — a market increasingly viewed as a future crypto hub — the company is strategically aligned with domestic expansion.

In 2024, Coinbase’s total revenues more than doubled, marking its second straight year of positive adjusted EBITDA. Transaction revenues — primarily driven by trading volume — also more than doubled year over year, reflecting both overall market growth and an increase in Coinbase’s U.S. market share.

To expand crypto’s practical use, Coinbase is investing in key infrastructure, including Base — a low-cost Layer 2 scaling solution. These initiatives, along with its focus on stablecoins, underscore the company’s efforts to advance real-world utility for digital assets.

Management envisions Coinbase to be the platform for companies that are trying to integrate cryptocurrency.

From a financial standpoint, Coinbase remains fundamentally sound. The company ended 2024 with $9.3 billion in USD resources — consisting of cash, cash equivalents, and USDC — up $3.8 billion from the prior year. Its debt burden has decreased in recent quarters, and improvements in both its debt-to-capital ratio and times interest earned suggest a strong ability to manage and service debt.

Nonetheless, rising costs — including higher transaction and operating expenses — continue to pressure margins. Moreover, the company is vulnerable to fluctuations in crypto asset prices. A significant drop in the value of Bitcoin, Ethereum, or other digital currencies could affect earnings, reduce the carrying value of its crypto holdings, and limit future cash flows. Such developments could impair liquidity and the company’s ability to meet ongoing obligations.

Factors to Consider for Block

Block, formerly known as Square, differentiates itself by offering a comprehensive commerce ecosystem enabling sellers to combine software, hardware and payments services from several vendors. Block's entry into the bitcoin market with the CashApp product bodes well. 

Block continues to hit major milestones – receiving FDIC approval to use Square Financial Services in March this year and the launch of Cash App Afterpay in late February this year. It also expects to invest in high return on equity growth initiatives across Cash App and Square.

The company continues to leverage its diverse revenue sources—Cash App, Square, and Afterpay—which also position it for global expansion. It remains committed to driving accelerated growth in both Cash App and Square, and with a supportive macroeconomic environment, anticipates steady increases in gross profit each quarter.

Block is actively investing in expanding its partner network and scaling its distribution channels. Its ability to integrate Bitcoin into consumer financial services stands out as a strategic advantage.

Despite these strengths, Block stock faces pressure due to rising competition within the fintech industry. Economic uncertainty stemming from President Donald Trump’s tariffs on major trading partners such as China, Canada, and Mexico poses a potential drag on performance in the near term. Meanwhile, rivals like PayPal and Shopify continue to challenge Block’s market share.

Furthermore, declining consumer spending in the food, beverage, and discretionary retail segments presents additional headwinds for the company.

Estimates for COIN and XYZ

The Zacks Consensus Estimate for COIN’s 2025 revenues implies a 4.5% year-over-year increase but the same for EPS implies a 68.3% decline. EPS estimates have moved southward over the past 30 days.

Image Source: Zacks Investment Research

On the contrary, the Zacks Consensus Estimate for XYZ’s 2025 revenues implies a year-over-year increase of 3.5% while the same for EPS implies a year-over-year decrease of 19.3%. EPS estimates have moved southward over the past 30 days.

Image Source: Zacks Investment Research

Are COIN and XYZ Shares Expensive?

Coinbase is trading at a forward earnings multiple of 48.12, below its median of 59.94 in a year. XYZ’s forward earnings multiple sits at 35.1, above its median of 31.86 over the past year.

Image Source: Zacks Investment Research

Conclusion

Being the largest crypto exchange, COIN’s performance is solely dependent on crypto movements. In contrast, Block taps Cash App, Square, and Afterpay for growth, but rising fintech rivalry and weak consumer spending weigh on its stocks. Both companies are expanding internationally.

COIN shares have gained 6% year to date, while Block shares have lost 31% in the same time. COIN carries a Zacks Rank #3 (Hold), while XYZ currently carries a Zacks Rank #4 (Sell). Thus, at present, COIN seems a safe investment option.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.