Coinbase's Strategic Move into Stock Trading: A Long-Term Play to Bridge Crypto and TradFi?

The financial landscape in late 2025 is witnessing a seismic shift as crypto-native platforms like Coinbase and Robinhood aggressively expand into traditional equity markets. Both companies are vying to redefine the future of finance, but their approaches-and the challenges they face-differ significantly. Coinbase, long a crypto-first exchange, has positioned itself as a bridge between decentralized finance (DeFi) and traditional finance (TradFi) through its "Everything Exchange" vision. Robinhood, meanwhile, has leveraged its retail-friendly model and rapid diversification into crypto and AI-driven tools to solidify its dominance in equity trading. This analysis evaluates whether Coinbase's strategic pivot into stock trading can catch up to Robinhood's entrenched position-and whether its long-term vision for tokenized equities and prediction markets can redefine its role in the financial ecosystem.

Coinbase's Crypto-First Vision: Building the "Everything Exchange"

Coinbase's 2025 expansion into stock trading marked a pivotal step in its mission to become a unified platform for all asset classes. By integrating 24/7 stock and ETF trading into its main app, Coinbase eliminated the need for users to juggle multiple platforms. This move was complemented by the launch of prediction markets, which allowed users to trade outcomes of events like elections and sports, leveraging Kalshi's regulatory framework.

The company's long-term thesis hinges on tokenization. Coinbase Tokenize, an institutional platform for real-world asset tokenization, aims to streamline access to tokenized equities, real estate, and other assets. Unlike competitors who rely on third-party platforms, Coinbase plans to issue tokenized equities in-house, giving it greater control over liquidity and settlement. This vertical integration strategy aligns with CEO Brian Armstrong's vision of a financial system where traditional and digital assets coexist seamlessly on-chain.

However, Coinbase's equity market share in late 2025 stood at 5.8% in centralized crypto exchanges, a decline from 7.0% at the start of the year. While institutional trading activity surged by 55% year-on-year in Q3 2025, the company faced headwinds in Q4, including a 9% drop in spot trading volumes and a $21 billion liquidation event in October. These challenges highlight the volatility inherent in crypto markets and the difficulty of transitioning to a broader financial services model.

Robinhood's Retail-Driven Momentum and Diversification

Robinhood's Q3 2025 results underscored its rapid ascent in both equity and crypto markets. Total net revenues doubled year-on-year to $1.27 billion, driven by a 300% surge in crypto revenue to $268 million and record equity notional trading volumes of $647 billion. The company's expansion into prediction markets, futures, and AI-driven tools like Robinhood Cortex-a platform for building custom trading indicators- has further diversified its offerings.

Robinhood's acquisition of Bitstamp and its pending deals for WonderFi (including Bitbuy and Coinsquare) have solidified its global crypto footprint. Additionally, its launch of tokenized U.S. stocks and ETFs for European customers, facilitated by partnerships with platforms like Bitpanda, has positioned it as a leader in 24/7 fractional trading outside traditional market hours. These moves reflect a strategic focus on accessibility and regulatory compliance, particularly in markets like the EU.

While Robinhood's exact stock trading market share in Q4 2025 remains undisclosed, its Q3 performance suggests continued dominance. The company's stock (HOOD) surged 204% in 2025, driven by strong revenue growth and product innovation. Analysts project a 2025 full-year EPS of $1.99, a 82.6% increase from 2024. With Q4 results scheduled for February 2026, Robinhood's ability to maintain this momentum will depend on its execution in emerging markets like prediction trading and AI-driven analytics.

Competitive Positioning: Crypto-First vs. Retail-First

Coinbase's strength lies in its institutional-grade infrastructure and regulatory partnerships. Its acquisition of Deribit and The Clearing Company has bolstered its derivatives and prediction market capabilities. However, its late entry into stock trading-compared to Robinhood's early 2020s dominance-has left it playing catch-up in retail adoption. Robinhood's user base, built on zero-commission trading and gamified interfaces, remains a formidable barrier to entry.

Coinbase's focus on tokenization and blockchain-based settlement could disrupt traditional equity markets in the long term. By enabling real-time capital reuse across spot, derivatives, and prediction markets, Coinbase aims to reduce friction in asset management. Yet, Robinhood's AI-driven tools and global expansion (via Bitstamp and WonderFi) offer immediate value to retail investors, who currently drive 25% of younger investors' portfolios.

Long-Term Value Proposition: Can Coinbase Catch Up?

Coinbase's long-term value proposition rests on its ability to unify crypto and TradFi through tokenization and institutional partnerships. Its plans to issue tokenized dividends and Bitcoin-based shareholder distributions could attract institutional investors seeking innovation. However, Robinhood's diversified revenue streams-spanning equities, crypto, options, and AI-provide a more immediate path to profitability.

The key differentiator will be execution. Coinbase's "Everything Exchange" vision requires seamless integration of disparate asset classes, a challenge even for well-funded platforms. Robinhood's agility in launching new products (e.g., Robinhood Chain, a Layer 2 blockchain for tokenized assets) suggests it may outpace Coinbase in short-term innovation. Yet, Coinbase's regulatory credibility and institutional focus could give it an edge in attracting large-cap investors.

Conclusion

Coinbase's strategic move into stock trading is a bold attempt to bridge crypto and TradFi, but its success hinges on overcoming retail adoption challenges and maintaining institutional momentum. While Robinhood's retail-first model and diversified offerings currently give it the edge in equity markets, Coinbase's long-term vision for tokenization and blockchain-based finance could redefine its role in the ecosystem. Investors must weigh these factors against macroeconomic risks, such as crypto market volatility and regulatory shifts, to assess which platform is better positioned for sustained growth.