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Most of the stock market’s attention has been directed to cryptocurrency, the hottest and most popular niche of the technology sector today. The idea behind most decisions is that, as the price of Bitcoin keeps rallying near an all-time high of $100,000 per coin, most—if not all—of the names related to cryptocurrencies will rally along with Bitcoin. That’s the one flaw most investors are coming to realize today.

For better or for worse, there is a major divide in the cryptocurrency stock universe today, even after signs from the gold market gave way to a buy signal for Bitcoin and its verticals. Shares of MicroStrategy Inc. have plummeted by as much as 18.2% in a single day, shedding more than 25% of the company’s market capitalization in the process.

Beyond the MicroStrategy dip, there is one major discrepancy to give investors another way into a potential cryptocurrency-related rebound, this time in the middleman between Bitcoin supply and those looking to get a piece of the popularity and action. This is where shares of Coinbase Global Inc. come into play, as the stock declined by over 7.6% when Bitcoin traded at new all-time highs in the same day.

Why MicroStrategy Stock Is Falling: Challenges Behind Its Decline from Glory

There is justifiable merit behind the parabolic price action in MicroStrategy stock, as its CEO, Michael Saylor, made some smart moves with the company’s capital. Reinvesting any and all free cash flow, mostly into Bitcoin holdings, enriched the balance sheet when and if the price of Bitcoin took off, as it does today.

However, markets are worried that Saylor might become blinded to his hot hand, thinking that whatever happened in the past could continue in the future. The fear arises from the fact that MicroStrategy is continuing to dilute shareholders, this time by raising up to $3 billion to buy more Bitcoin.

This is where investors need to weigh the pros and cons of being diluted in exchange for gaining leverage into having more Bitcoin on the balance sheet. So far, this exchange has proven profitable, judging by the 705% rally the stock delivered over the past 12 months, even after this week’s sharp selloff.

One problem, however, might be that Saylor is raising all of this money to buy Bitcoin at its all-time highs, sort of like buying back stock when it trades at massive valuations; at some point, the returns just won’t make sense. And they don’t make sense for Wall Street analysts, as the consensus price target has fallen behind at $331.1 a share.

From where it trades today, MicroStrategy stock faces a potential downfall of 14.6%, considering the current targets, which might be too much risk for investors to bear.

Coinbase Operates in a League of Its Own: Wall Street’s Take on Its Unique Vertical

Unlike MicroStrategy, which bets on Bitcoin through its balance sheet, Coinbase's advantage is that it will do well no matter where the price of Bitcoin goes—or at least that may be the thinking behind Wall Street's price targets.

Whether Bitcoin is at an all-time high sand on the rise or coming into headwinds and potential selloffs, traders will be there to take advantage of this volatility. The trading activity will be a fee source for Coinbase moving forward. Leaning on this belief, those at Needham & Company decided to reiterate their "Buy" rating on Coinbase.

The surprise came from their price targets, though. Although they were previously at $290 a share, renewed market activity and attention around Bitcoin call for a valuation closer to $375 a share. Coinbase would need to rally by as much as 28% from where it trades today, not to mention a new 52-week high, to prove these new views right.

However, another tailwind is adding to Coinbase stock's potential upside, and this one is coming from a new potential role in the United States economy. News broke out stating that Coinbase's CEO Brian Armstrong is a potential candidate to oversee all things cryptocurrency in the United States for the new administration.

This appointment would give Coinbase access to the information and prowess it needs to become a power player in global financial markets if accepted and formalized. Investors can liken this situation to when the government calls on a big investment bank like Goldman Sachs Group Inc. to oversee and advise.

More than that, BlakcRock Inc. has already shown interest in Bitcoin by adding it to its asset management program and opening a new exchange-traded fund (ETF). This means that, as Bitcoin becomes more widely accepted by Wall Street, regulations and oversight would have to follow, and that's where Coinbase comes into play.

This is a completely different picture than the risks and volatility coming out of MicroStrategy stock right now, and that investors can take advantage of that distinction before the rest of the market realizes that it's there for the taking.