bitcoin is not “crypto”
An X post from Jack Dorsey resurrected an old question: Is Bitcoin part of “Crypto” or a category of its own?
On October 19, 2025, Jack Dorsey posted three words on X: “Bitcoin is not crypto.” The post quickly drew attention across the platform and in media coverage. It reflects a view he has long held, that is Bitcoin should be considered as currency with its own rules and history, not included in the wider token market.
Dorsey argued that Bitcoin (BTC) belongs to a separate category. It was launched without foundation or premine and managed conservatively. The network is designed for payments and savings, not the same Smart Contract Platforms and app tokens that evolve rapidly and serve multiple use cases.
Let’s unpack the argument.
To understand why, it helps to look at how Bitcoin’s design, governance and regulation differ from the rest of the crypto world.
do you know El Salvador has become the first country to adopt Bitcoin as legal tender. The law was passed on June 9, 2021, and took effect on September 7, 2021.
Fiscal policy and issuance: Fixed policies versus flexibility
Starting with the supply, the release of Bitcoin follows a fixed schedule, while most other networks treat the supply as a feature.
The new coins were issued as Block rewardswhich stops roughly every 210,000 blocks until the total supply reaches 21 million BTC. The fourth division occurred at block 840,000 in April 2024, reducing the reward from 6.25 BTC to 3.125 BTC. Each reduction makes miners more dependent on transaction fees and less on new issuance.
Change The release of Bitcoin will require a lot of social consensus among the users running the nodes, allowing investors to model supply years in advance. That predictability remains a key part of the “store-of-value” appeal.
Most other networks approach monetary policy as a design choice. Take Ethereum, for example: Ethereum Improvement Proposal (EIP) 1559 A base-fee burn was introduced that reduces net issuance when demand is high, and the merge update changed the network to proof-of-stake (POS), reducing gross issuance. Together, these changes create a supply model that dynamically adjusts to network activity.
That flexibility can enhance the user experience and enable new features, while Bitcoin’s rigidity is intended to maintain financial credibility.
Consensus and Security Budget: POW Minimalism vs. POS Upgrading speed
How a blockchain secures itself shapes everything that follows. Bitcoin pays for security with work, while proof-of-stake (POS) systems pay with stake.
In bitcoin, Miners Use energy to add blocks, and full nodes enforce a small, conservative set of rules. Its script language is intentionally simple and incomplete. Fewer moving parts means fewer opportunities for things to break, which is why base-layer changes are rare and carefully limited.
As the reward continues to stagnate, the miner’s income gradually shifts from new coins to transaction fees—Bitcoin’s long-term “security budget.” This raises important questions for the future, such as how incentives will hold up in low-pay periods. It also shows why surges in activity are driving fees higher, with robust usage in layers such as Lightning Networkthing for the economic miner.
Many crypto platforms, most notably Ethereum, use Pos. Validators lock the ether (Eth), earn rewards for proposing and validating blocks and can be punished for misconduct. This model allowed faster upgrades: integration in 2022 moved to POS, Shapella (2023) enabled rollbacks and EIP-4844 (2024) reduced data costs for rollups.
Bitcoin values security, stability and minimal change in its base layer, while most POS networks emphasize faster upgrades and higher throughput.
do you know A 2010 bug briefly created 184 billion BTC before the chain merged into a 53-block reorganization. The “overflow” incident remains Bitcoin’s biggest reorg. The second largest occurred in 2013 during a software incompatibility between versions 0.7 and 0.8 and spanned 24 blocks.
Management and Culture: “Ossify vs. optimize” in practice
Who changes the rules, how quickly and how safely? Bitcoin evolves slowly by design, while app-oriented chains prioritize speed and flexibility.
Bitcoin is evolving slowly by design. Proposals begin as bitcoin improvement proposals, undergo public argument and proceed only when developers, miners and node operators signal broad support. There is no onchain vote or foundation directing decisions. Upgrades are usually shipped as soft forks, maintaining compatibility for older nodes.
The Upgrading Taproot “Quick test” signaling is used mechanism in 2021, lock-in was achieved in June and activating block 709,632 on November 14, 2021. The drawn process gave developers, miners and node operators time to coordinate and reduce the risk of activation. Cadence (few changes, lots of thinking) is what people mean by “ossifying Bitcoin.”
Smart contract platforms take the opposite approach. Ethereum introduces changes through the EIP process, following a stable release cycle—eg. Proto-danks to reduce data costs.
Different goals, different tempo: Bitcoin protects financial credential through conservative edits, while app-focused chains emphasize delivering new features and maintaining developer activity.
do you know A significant portion of BTC can be lost forever. Estimates based on chainalysis suggest that approximately 2.3 million-3.7 million BTC are permanently lost—a double percentage of the 21 million supply cap.
What’s running on top: Paid vs. general purpose apps
Bitcoin maintains a small base layer: UNSPENT TRANSACTION OUTPUT (UTXO) Accounting, a limited stack-based script (intentionally not complete) and relatively modest logic beyond that.
Much of Bitcoin’s payment activity is moving to second-layer networks such as the Lightning Network. It uses bidirectional channels and Hash time locked contracts (htlcs) To route instant, low-cost payments without changing base-layer policies. Daily transactions happen offchain, while settlement remains anchored to the main network.
Smart contract platforms take the opposite approach. Ethereum supports rich, state contracts in its layer 1 and encourages composability – decentralized finance (defi), non-fungible tokens (NFT) and Onchain games that build on top of each other. This method allows faster experimentation but depends on a flexible, regularly upgraded base layer.
Bitcoin is still experimenting at the edges. The launch of Ordinals and runes Around the 2024 halving pushed fees to record highs, boosting miner income and providing a real test of the security-driven world. Crucially, none of this changed Bitcoin’s monetary policies or minimalist layer-1 design. The pattern holds: Keep the base stable and let new activities grow above or to the side.
Market structure and what it means: the separate BTC bucket
Exchange-traded funds (ETF), options and flow data suggest that institutions are treating Bitcoin differently from the rest of the crypto market.
On January 10, 2024, the US Securities and Exchange Commission Approved rule change allows exchanges to list and trade spot Bitcoin Exchange-Traded Products (ETP). The decision BTC has been traded in major venues, including the New York Stock Exchange (NYSE) ARCA, NASDAQ and the Chicago Board Options Exchange (CBOE).
These are both platforms Used by brokers, Registered Investment Advisers (RIAS) and pension funds. Whatever you call the asset class, retirement and wealth platforms now have a dedicated line for Bitcoin.
The market infrastructure expanded from there. In late 2024, US regulators approved the options Spot Bitcoin ETF and the CBOE launched index options tied to a basket of those funds. In short, it’s the transfer of risk and price discovery using tools that institutions already understand – something tokens still lack.
The flow data made that shift clear. Throughout 2024 and 2025, creations and redemptions of new funds become a daily fixture, with dashboards tracking assets and net flows. Investors gain exposure to Bitcoin through traditional wrappers rather than crypto-native venues.
Policy signals point in the same direction. US derivatives regulators have long classified Bitcoin as a commodity. In 2025, staff from the US SEC and the Commodity Futures Trading Commission noted that registered exchanges could facilitate trading in some crypto products.
Taken together, distribution channels, hedging tools, flow reporting and regulatory labels make a strong case for Jack’s “bitcoin is not crypto” argument. The markets have put it in a separate bucket.
