You may get a few different answers to that. If you ask Mike Moffat at Schiit that question he'll tell you to take the USB part and...well I can't repeat it, the mods would censor it anyway
His humble opinion, as stated in the Schiit FAQ for the Bifrost is that USB is utter rubbish and virtually anything is better. However, in all parts of this forum you'll find folks who adamantly reject that notion that USB is rubbish. Many of those folks have $2k USB interfaces and insist it is indeed superior to S/PDIF. Some of them have tried it with their Bifrost and found it to be better as well. Schiit's official position is generally, S/PDIF, when available, is absolutely superior to the current USB implementation, and they'll actively encourage you to NOT buy the $100 USB module if you have an alternative with coax first, followed by toslink/optical, with USB bringing up the rear
The longer story is, in
most cases, possibly excluding really really high end USB interfaces, S/PDIF is better. However S/PDIF is dependent entirely on the quality of the transmitter and receiver. The Bifrost receiver is top notch. The unknown is how's the quality on the PC side transmitter?
Using the S/PDIF outputs on the motherboard or sound card, you're using the internal soundcard's drivers and hardware (but
not the DAC obviously) so if it's introducing noise on the hardware side of if you haven't setup the mixer/driver properly, you're still going to get garbage. If the driver lets you set bit-perfect output, and it's not prone to pick up noise before sticking it in the optical out, then I'd say the toslink is the better bet.
(Note contrary to common assumption, both coax and toslink/optical are S/PDIF. Same protocol, different transmission method.)
So if your PC's mixer is mucking things up and has no bit-perfect/asio/kernel-streaming/WSAPI, etc, USB may be superior just because the bifrost driver has that option. If your PC's mixer/driver is fine, optical's probably the better idea.
Either way, be sure to get a decent, but not multi-hundred $ cable for it. Cheap garbage plastic optical cables are a mess for the protocol. I've tried glass, and while nice, ti breaks too easily. BJC sells the best "compromise" cable I've seen....it uses some Mitsubishi optical polymer rather than cheap acrylic. Generally it runs between $8-20 + shipping depending on length. USB is also brutally cable dependent more than people think. Something similar from BJC, or even Monoprice should be decent. I'm often not fond of the Monoprice build quality. Coax has a bit more play in how well it handles cheap cabling.