Spot Crypto Guide: Five Coins at Schwab

Before looking at the differences in the five cryptocurrencies Schwab offers for spot trading, it's helpful to understand what they have in common. All are native to a particular blockchain (with the exception of LINK, which lives on the Ethereum blockchain), but each blockchain was designed for a specific purpose and operates in different ways. Bitcoin, for example, uses a proof-of-work system, in which computers compete in problem-solving to validate transactions. Ethereum, Solana, and Avalanche blockchains use proof of stake, in which holders commit—or stake—coins to help run and secure the network.

Investors in these assets don't own shares in their underlying blockchains or receive any such shareholder rights or claims to earnings. From a fundamental perspective, cryptocurrency prices depend entirely on supply and demand, which can be driven by adoption of the underlying blockchain network for business purposes or purely speculative interest.

The cryptocurrencies discussed below share substantial risks. Their prices are relatively volatile, and their underlying networks can lose users to competitor blockchains or suffer from outages, hacking, and poor governance.

Bitcoin and other cryptocurrencies have become increasingly accepted as financial assets by the public, institutional investors, and government regulators in recent years. But that could change. In the United States, regulatory approaches to cryptocurrencies have been volatile. The Trump administration has strengthened cryptocurrencies' place in U.S. financial markets, but a new administration could undo that. Growing institutional adoption has likely reduced that risk, but it hasn't eliminated it.

Bitcoin is by far the biggest cryptocurrency by market cap, at $1.5 trillion as of mid-September 2026. Unlike ether, SOL, and AVAX, bitcoin's underlying blockchain was not designed as a platform for running applications, though it was designed for peer-to-peer transfers. Many investors who buy bitcoin do so because they see it as a store of value: A monetary asset that can provide a hedge against debasement or devaluation of government-issued currencies.

Bitcoin's investment thesis rests largely on its finite supply and belief in its growing adoption as an alternative asset and means of exchange. The underlying blockchain generates no earnings, and the coin itself returns no yield from staking or other native uses.

While some might describe bitcoin as an inflation hedge, and inflation can result from monetary debasement, so far bitcoin's price has shown little long-term correlation with inflation or anything else. In some shorter-term periods, it has behaved more like a speculative risk asset, with a positive correlation to equities. However, over a multiyear period, it has exhibited a low correlation with most traditional asset classes.

From a fundamental perspective, one of the biggest risks facing bitcoin investors is simply a lack of demand from new investors. Unlike gold, for example, bitcoin has no intrinsic uses in the physical world. Its perceived value is mostly derived by consensus agreement alone.

Will bitcoin's fixed supply and growing adoption sustain long-term demand, or will demand eventually weaken because the asset generates no earnings or yield and depends largely on continued investor acceptance as an alternative to fiat currencies?

All three of these cryptocurrencies' blockchains (Ethereum, Solana, and Avalanche, respectively) were designed to support the deployment of smart contracts and other blockchain-based applications, including tokenization of financial assets, decentralized trading, and payment systems. Think of them as massive, decentralized app stores with technology that could potentially disrupt multiple industries.

These three cryptocurrencies have this much in common: They're all used to pay network transaction fees and to compensate the node operators who provide the blockchain's reliability and security by validating transactions. Demand for these coins comes from app developers and end users, such as investors in tokenized assets or parties to money transfers, as well as speculative investors in the coins.

But even growing use of the blockchains, while supporting demand for the native coins, doesn't necessarily mean the values of those coins will rise, reduce the available supply, or otherwise benefit the coins' investors.

Ether is the native token of the Ethereum blockchain, one of the blockchains that is most widely used for commercial purposes, according to Developer Report. Launched in 2015, Ethereum expanded on the Bitcoin blockchain in a way that enabled more complex computing operations to host decentralized, secure autonomous applications, particularly in decentralized finance, or DeFi.

Investors generally buy ether because they believe in Ethereum's future as a central platform for financial applications, including stablecoins, tokenized assets, and the settlement of financial transactions. Their basic thesis is the growing use of the Ethereum ecosystem will increase demand for ether, which is used to pay transaction fees and is staked in the transaction-validation process.

Unlike bitcoin, ether has no formal fixed supply cap, but its issuance is controlled. New ether is constantly being created to pay the people who keep the network running and is regularly destroyed to keep the supply steady and support the coin's value.

Like the Bitcoin blockchain, the Ethereum blockchain doesn't generate an actual profit. For its developers and investors, the bet on ether is that Ethereum will become and remain the dominant infrastructure for a growing number of blockchain-based applications, thereby fueling long-term demand for the coin and driving up its value. Its main advantages are its established developer ecosystem, liquidity, and broad use in areas such as DeFi and stablecoins. But these advantages can erode and do not guarantee continued dominance.

Ethereum has achieved a strong market position in the burgeoning blockchain-based digital economy. But the industry is still in its infancy and newer entrants—including Solana and Avalanche—pose competitive threats. Ether has already faced scalability and governance challenges and its role as a market leader is far from guaranteed.

Ethereum's layer-2 networks can expand the ecosystem by processing transactions more cheaply, while relying partly on Ethereum's layer-1 blockchain for settlement and security. The risk is that layer-2 growth shifts too much economic value away from the main blockchain, sapping demand for ether.

Will growth throughout the Ethereum ecosystem create enough growing, durable demand for the ether coin's value to rise over time, or will competitors attract enough business to limit any such appreciation?

The Solana blockchain was designed as a faster, less-expensive version of Ethereum and has become one of Ethereum's biggest competitive threats since its full launch in 2020. Solana is a popular platform for decentralized trading, stablecoin payments, and consumer-facing applications. It has a much smaller market cap than Ethereum (close to $60 billion as of September 2026) but more than 10 times the number of daily active addresses, according to Glassnode data—at least partly because its low fees make it attractive to bots and applications involving many transactions.

The Solana blockchain's native currency, SOL, is used to pay transaction fees and for staking. It can also be used as collateral to borrow stablecoins or other cryptocurrencies and as margin for leveraged trades on the blockchain. These additional uses could support demand for SOL but may add to price volatility during market disruptions.

The supply of SOL is not fixed. Coins are created and "burned," depending on the level of activity on the network. SOL's current inflation rate is just over 4%, but the plan is to eventually settle at about 1.5% annually. At that point, the new coins will be paid to stakers—holders of the coins who assign them to network validators.

The Solana blockchain has suffered several outages in recent years—though it has been stable since February 2024. Questions still persist about the network's reliability as it continues to add users.

Will Solana continue to prove its reliability, and will inexpensive, high-volume network activity create durable demand for SOL and high-volume usage statistics?

Created in 2020, the Avalanche network of blockchains was launched as a solution to the "blockchain trilemma," the challenge of developing a blockchain that achieves decentralization, high-level security, and scalability all at once. Again, the goal was to create a faster, cheaper version of the Ethereum blockchain. Avalanche developers' solution: Create multiple, interconnected blockchains that can be customized according to users' needs.

Avalanche is especially suitable for games and financial applications and has attracted multiple financial institutions, particularly for asset tokenization. One key advantage Avalanche has is its compatibility with Ethereum's software, making it relatively easy to transfer Ethereum-based applications onto Avalanche.

Avalanche's native currency, AVAX, has several different functions, all of them similar in nature to the other coins discussed above and below. It is used to pay transaction fees, for staking, and to pay costs associated with operating the customized blockchains. AVAX used for transaction fees are generally "burned," or destroyed, while staking rewards create additional coins. Avalanche says the maximum long-term supply of AVAX is 720 million coins.

The investment case for AVAX is the hope that Avalanche becomes a widely used infrastructure for customized financial and corporate applications. Strong network growth could drive demand for AVAX via transaction fees, staking demand, and validator registration costs.

Customized blockchains on the Avalanche network can use their own tokens, fee systems, and validator rules. That means not every successful Avalanche-based app will create demand for AVAX. In addition, it faces competition from Ethereum and others. At the same time, Avalanche has focused on attracting as many users as possible in the hope it will be able to capture more value.

Will growth across the Avalanche ecosystem create durable demand for AVAX, or will customized blockchains capture most of the value through their own tokens and fee systems?

Chainlink and its token, LINK, differ significantly from the blockchains and cryptocurrencies discussed so far. In fact, Chainlink isn't a blockchain at all. It's an oracle network, a decentralized network that can bring outside information—such as market prices and event data—to blockchain applications and support communication between blockchains, as well as between blockchains and off-chain entities.

LINK can be used to pay Chainlink node operators and can be staked as collateral to help secure specified services. This is different from the proof-of-stake validation used by blockchains like Ethereum.

The investment thesis for LINK is the belief that demand for data and communication between blockchains will grow, and that Chainlink will remain a widely used provider, a piece of critical infrastructure linking the on-chain and off-chain economies. Greater paid usage should support demand for LINK.

Users aren't required to use LINK to pay for Chainlink services. In fact, they can pay however they like, including offline in fiat currencies. Chainlink says its "payment-abstraction" system converts eligible revenue into LINK, with some LINK then placed in an on-chain reserve. This process has raised questions about whether growing demand for Chainlink's services will necessarily drive growing, durable net demand for LINK.

Chainlink also faces challenges from multiple competitors. It's currently widely used, but the industry is in its infancy, and competitors have begun to offer innovative approaches and features.

Will growing demand for Chainlink's services create durable demand for LINK, or will payment flexibility and competition limit the token's ability to capture that value?

Buying on the spot market, also known as the cash market, means buying the asset itself. Not shares in an exchange-traded product (ETP) that holds the asset. Not a futures contract that offers exposure to the asset's price. And not stock in a company—if there is one—operating a blockchain.

Investors who buy crypto on the spot market have no ownership in the blockchain network or any type of shareholder rights or claims on profits, revenue, or related assets. It's a bit like buying physical gold versus shares in a gold exchange-traded fund (ETF) or gold mining company.

At Schwab, spot cryptocurrency will be held in a separate Schwab Crypto account offered by Charles Schwab Premier Bank and linked to the investor's brokerage account. The bank will serve as custodian, meaning investors will not hold the cryptocurrency itself and will therefore not need to manage private keys.

Cryptocurrencies offered by Charles Schwab Premier Bank, SSB, are not securities; are not protected by SIPC; are not insured by the FDIC; are not deposits; and may lose value.