Bitcoin is not “crypto”
A recent X post from Jack Dorsey has reignited the debate: Is Bitcoin a part of “crypto” or a distinct entity?
On Oct. 19, 2025, Jack Dorsey tweeted “bitcoin is not crypto.” The statement quickly sparked discussions on the platform and in the media. It embodies his long-held belief that Bitcoin should be seen as a form of money with its unique regulations and history, separate from the wider token market.
Dorsey believes Bitcoin (BTC) occupies a unique category. It launched without a foundation or pre-mined coins and is governed conservatively. The network serves primarily as a medium for payments and savings, in contrast to smart contract platforms and app tokens that evolve rapidly and support various applications.
Let’s explore this argument further.
To grasp why, it’s useful to examine how Bitcoin’s design, governance, and regulatory framework differ from other cryptocurrencies.
Did you know? El Salvador became the first nation to recognize Bitcoin as legal tender. The law was enacted on June 9, 2021, and became effective on Sept. 7, 2021.
Monetary policy and issuance: Fixed rules vs. flexible policy
Bitcoin’s issuance adheres to a fixed timeline, unlike most other networks that treat supply as adjustable.
New bitcoins are generated as block rewards, which are halved approximately every 210,000 blocks until the total supply reaches 21 million BTC. The fourth halving took place at block 840,000 in April 2024, reducing the reward from 6.25 BTC to 3.125 BTC. Each halving forces miners to rely more on transaction fees than on new coin generation.
Modifying Bitcoin’s issuance would necessitate a significant social consensus among node operators, allowing investors to predict supply years ahead. This reliability is vital to its appeal as a “store-of-value.”
In contrast, many networks view monetary policy as an adjustable feature. For instance, Ethereum’s EIP 1559 introduced a base-fee burn that lowers net supply during high-demand periods, while the Merge transition to proof-of-stake (PoS) reduced overall issuance. These modifications create a supply model that adapts according to network activity.
This adaptability can improve user experience and unlock new functionalities, while Bitcoin’s rigidity is intended to maintain monetary integrity.
Consensus and security budgets: PoW minimalism vs. PoS upgrade velocity
The security mechanism of a blockchain influences everything that follows. Bitcoin secures itself through work, while proof-of-stake (PoS) networks rely on the staked assets.
In Bitcoin, miners expend energy to add blocks, while full nodes enforce a strict, conservative set of rules. Its scripting language is purposefully simple and not Turing-complete. A reduced complexity minimizes the risk of breakdowns, making significant base-layer changes infrequent and carefully considered.
As block rewards continue to diminish, miner income will gradually depend more on transaction fees, representing Bitcoin’s enduring “security budget.” This raises essential questions about future incentives during periods of low fees. It also highlights the importance of activity surges that elevate fees, alongside regular usage of solutions like the Lightning Network, for miner sustainability.
Many crypto platforms, particularly Ethereum, utilize PoS. Validators lock up Ether (ETH), earn rewards for proposing and approving blocks, and face penalties for misconduct. This approach has facilitated faster upgrades: The Merge in 2022 transitioned to PoS, Shapella (2023) enabled withdrawals, and EIP-4844 (2024) lowered rollup data costs.
Bitcoin gives priority to security, stability, and minimal changes at its fundamental layer, whereas most PoS networks focus on quicker upgrades and increased throughput.
Did you know? A bug in 2010 temporarily created 184 billion BTC before the chain was reverted in a 53-block rollback. This “value overflow” incident remains Bitcoin’s largest reorganization, with a second significant reorganization occurring in 2013 due to software incompatibility between versions 0.7 and 0.8, spanning 24 blocks.
Governance and culture: “Ossify vs. optimize” in practice
Who modifies the rules, how promptly, and how securely? Bitcoin evolves gradually by design, while chains focused on apps prioritize speed and adaptability.
Bitcoin’s evolution is deliberately slow. Proposals initiate as Bitcoin Improvement Proposals, undergo public debate, and advance only with broad consensus among developers, miners, and node operators. There are no on-chain votes or central authority directing actions. Upgrades generally happen as soft forks to maintain compatibility for older nodes.
The Taproot upgrade utilized the “Speedy Trial” signaling mechanism in 2021, achieving lock-in in June and activating at block 709,632 on Nov. 14, 2021. This prolonged process allowed developers, miners, and node operators to coordinate, reducing activation risks. This measured approach (few changes, ample discussion) is what is often referred to as Bitcoin “ossifying.”
In contrast, smart contract platforms adopt an alternative strategy. Ethereum implements changes via the EIP process, adhering to an ongoing release schedule — e.g., post-Merge access to withdrawals and proto-danksharding to minimize data costs.
Different objectives result in different paces: Bitcoin safeguards monetary integrity through cautious adjustments, while application-oriented chains focus on delivering new capabilities and maintaining developer engagement.
Did you know? A considerable amount of BTC may be permanently lost. Estimates based on Chainalysis indicate that roughly 2.3 million to 3.7 million BTC are irretrievably lost — representing a double-digit percentage of the 21 million supply limit.
What runs on top: Payments vs. general-purpose apps
Bitcoin maintains a minimal base layer: unspent transaction output (UTXO) accounting, a limited stack-based script (intentionally non-Turing complete), and relatively simple logic beyond that.
Much of Bitcoin’s payment processing is transitioning to second-layer solutions like the Lightning Network. This network employs bidirectional channels and Hash Time Locked Contracts (HTLCs) to facilitate instant, low-fee transactions without modifying base-layer rules. Everyday transactions occur off-chain, while settlement remains connected to the primary network.
Conversely, smart contract platforms like Ethereum provide rich, stateful contracts on layer 1 and promote composability — enabling decentralized finance (DeFi), non-fungible tokens (NFTs), and on-chain games to build upon each other. This setup fosters faster experimentation but relies on a flexible, frequently enhanced base layer.
Bitcoin still conducts experiments on the margins. The introduction of Ordinals and Runes around the 2024 halving led to record-high fees, increasing miner revenue and presenting a real-world assessment of fee-derived security. Importantly, none of this altered Bitcoin’s monetary principles or minimalist layer-1 design. The underlying pattern persists: Maintain base stability while allowing new activities to expand on top or alongside it.
Market structure and what it means: BTC’s separate bucket
Developments in exchange-traded funds (ETFs), options, and flow data indicate that institutions perceive Bitcoin distinctly from the rest of the cryptocurrency market.
On Jan. 10, 2024, the US Securities and Exchange Commission approved regulatory amendments allowing exchanges to list and trade spot Bitcoin exchange-traded products (ETPs). This decision placed BTC in mainstream trading venues, including the New York Stock Exchange (NYSE) Arca, Nasdaq, and the Chicago Board Options Exchange (Cboe).
These venues are utilized by brokerages, registered investment advisers (RIAs), and pension funds. Regardless of terminology used to describe the asset class, retirement and wealth management platforms now have a dedicated space for Bitcoin.
Market infrastructure expanded further. By late 2024, US regulators had authorized options on spot Bitcoin ETFs, and Cboe introduced index options correlated with a basket of these funds. In short, this offers risk transfer and price discovery through familiar tools for institutions — a feature most tokens still lack.
The emerging flow data highlighted this shift. Through 2024 and 2025, creations and redemptions in new funds became a regular occurrence, with dashboards tracking asset movements and net flows. Investors were gaining exposure to Bitcoin through traditional structures rather than crypto-native platforms.
Regulatory signals corroborate this trend. US derivatives regulators have consistently classified Bitcoin as a commodity. In 2025, staff from the US SEC and the Commodity Futures Trading Commission observed that registered exchanges could facilitate trading of certain spot commodity crypto products.
In summary, the channels for asset distribution, hedging mechanisms, flow reporting, and regulatory classifications strongly support Jack’s assertion that “bitcoin is not crypto.” Markets have effectively placed it in a distinct category.
