Bitcoin is not “crypto”
An X post from Jack Dorsey sparked an enduring debate: Is Bitcoin part of “crypto” or a distinct category?
On Oct. 19, 2025, Jack Dorsey shared three words on X: “bitcoin is not crypto.” His post quickly gained traction across the platform and in the media. Dorsey has consistently argued that Bitcoin should be considered money with its own set of rules and history, separate from the broader token marketplace.
Dorsey contends that Bitcoin (BTC) occupies a distinct category. Launched without a foundation or premine, its governance is conservative. The network is oriented towards payments and savings, unlike smart contract platforms and app tokens which evolve rapidly and cater to various use cases.
Let’s unpack this argument.
To grasp why, we need to explore the differences in Bitcoin’s design, governance, and regulation compared to the broader crypto landscape.
Did you know? El Salvador was the first nation to adopt Bitcoin as legal tender, with the law taking effect on Sept. 7, 2021.
Monetary policy and issuance: Fixed rules vs. flexible policy
Beginning with supply, Bitcoin’s issuance adheres to a fixed schedule, whereas most other networks treat supply as an adjustable feature.
New coins emerge as block rewards, halving approximately every 210,000 blocks until the total reaches 21 million BTC. The fourth halving occurred at block 840,000 in April 2024, reducing the reward from 6.25 BTC to 3.125 BTC. This reduction forces miners to rely more on transaction fees rather than new issuance.
Any change to Bitcoin’s issuance demands overwhelming social consensus among users running nodes, allowing investors to project supply years ahead. This predictability remains a crucial aspect of its “store-of-value” appeal.
In contrast, most networks approach monetary policy as a design option. For example, Ethereum’s Improvement Proposal (EIP) 1559 introduced a base-fee burn that reduces net issuance during high-demand periods, while the Merge update transitioned the network to proof-of-stake (PoS), which lowered gross issuance. These modifications create a supply model that adjusts based on network activity.
This flexibility can enhance user experience and allow new features, while Bitcoin’s rigidity is designed to maintain monetary credibility.
Consensus and security budgets: PoW minimalism vs. PoS upgrade velocity
How a blockchain secures itself influences everything that follows. Bitcoin secures through work, while proof-of-stake (PoS) systems secure through stake.
In Bitcoin, miners expend energy to add blocks, and full nodes enforce a small, conservative set of rules. Its scripting language is purposely simple and not Turing-complete. Fewer moving parts reduce the possibility of failure, which is why changes to the base layer are rare and tightly regulated.
As the block reward diminishes, miner revenues gradually transition from new coins to transaction fees — Bitcoin’s long-term “security budget.” This raises critical questions for the future, such as how incentives will sustain during low-fee periods. It also highlights the significance of activity surges that increase fees and maintain steady usage in layers like the Lightning Network for miner economics.
Most crypto platforms, particularly Ethereum, use PoS. Validators lock up Ether (ETH), earn rewards for proposing and confirming blocks, and can face penalties for misconduct. This model allows for rapid upgrades: The Merge in 2022 transitioned to PoS, Shapella (2023) enabled withdrawals, and EIP-4844 (2024) lowered data costs for rollups.
Bitcoin prioritizes security, stability, and minimal change at its core, while most PoS networks focus on quicker upgrades and greater throughput.
Did you know? A bug in 2010 briefly produced 184 billion BTC before the chain was reverted in a 53-block reorganization. This “value overflow” incident remains Bitcoin’s largest reorg. The second-largest occurred in 2013 due to software incompatibility between versions 0.7 and 0.8 and spanned 24 blocks.
Governance and culture: “Ossify vs. optimize” in practice
Who alters the rules, how swiftly, and how securely? Bitcoin evolves slowly by design, while app-focused chains prioritize speed and flexibility.
Changes in Bitcoin progress slowly by intention. Proposals start as Bitcoin Improvement Proposals, undergo public debate, and advance only if developers, miners, and node operators broadly show support. There are no on-chain votes or a foundation directing outcomes. Upgrades typically occur as soft forks, maintaining compatibility for older nodes.
The Taproot upgrade used the “Speedy Trial” signaling mechanism in 2021, achieving lock-in by June and activating at block 709,632 on Nov. 14, 2021. This protracted process allowed for coordination among developers, miners, and node operators to minimize activation risks. This pattern (minimal changes, extensive deliberation) is what is referred to by Bitcoin’s “ossifying.”
In contrast, smart contract platforms adopt a different method. Ethereum introduces changes via the EIP process, adhering to a consistent release cycle — e.g., post-Merge withdrawals and proto-danksharding for reduced data costs.
Different aims lead to different paces: Bitcoin safeguards monetary credibility through conservative edits, while app-centric chains emphasize introducing new features and sustaining developer engagement.
Did you know? A significant portion of BTC may be lost forever. Chainalysis estimates suggest that approximately 2.3 million to 3.7 million BTC are permanently lost — representing a double-digit percentage of the 21 million supply cap.
What runs on top: Payments vs. general-purpose apps
Bitcoin maintains a small base layer: unspent transaction output (UTXO) accounting, a limited stack-based script (purposely not Turing-complete), and relatively modest logic beyond that.
Much of Bitcoin’s payment activity is transitioning to second-layer networks such as the Lightning Network. It utilizes bidirectional channels and Hash Time Locked Contracts (HTLCs) to facilitate instant, low-fee payments without altering base-layer regulations. Routine transactions occur off-chain, while settlement is anchored to the main network.
In contrast, smart contract platforms like Ethereum support robust, stateful contracts on layer 1 and promote composability — decentralized finance (DeFi), non-fungible tokens (NFTs), and on-chain games building upon each other. This method allows for accelerated experimentation, but relies on a flexible and frequently updated base layer.
Bitcoin continues to experiment at the margins. The advent of Ordinals and Runes around the 2024 halving pushed fees to unprecedented highs, enhancing miner revenue and providing a real-world assessment of fee-driven security. Crucially, none of these changes altered Bitcoin’s monetary guidelines or its minimalist layer-1 design. The continuing theme is: Stabilize the base and allow new activities to flourish on top or alongside.
Market structure and what it means: BTC’s separate bucket
Exchange-traded funds (ETFs), options, and flow data indicate that institutions view Bitcoin differently from the broader crypto market.
On Jan. 10, 2024, the US Securities and Exchange Commission sanctioned rule modifications permitting exchanges to list and trade spot Bitcoin exchange-traded products (ETPs). This decision introduced BTC to mainstream trading venues, including the New York Stock Exchange (NYSE) Arca, Nasdaq, and the Chicago Board Options Exchange (Cboe).
These platforms serve brokerages, registered investment advisers (RIAs), and pension funds. Regardless of the classification, retirement and wealth management platforms now feature a dedicated segment for Bitcoin.
The market infrastructure expanded from there. By late 2024, US regulators had approved options for spot Bitcoin ETFs, and Cboe launched index options tied to a collection of those funds. Essentially, it’s risk transfer and price discovery using familiar tools for institutions — a feature that most tokens currently lack.
The trend in flow data has made this shift evident. Throughout 2024 and 2025, creations and redemptions in the new funds became a regular occurrence, with dashboards monitoring assets and net inflows. Investors were acquiring Bitcoin exposure through traditional financial structures rather than through crypto-native means.
Policy indications support the same narrative. US derivatives regulators have long categorized Bitcoin as a commodity. In 2025, personnel from the US SEC and the Commodity Futures Trading Commission acknowledged that registered exchanges could facilitate trading in specific spot commodity crypto products.
When combined, these distribution channels, hedging mechanisms, flow reporting, and regulatory classifications provide strong support for Jack’s assertion: “bitcoin is not crypto.” Markets have already categorized it into a distinct bucket.
