Why We Crypto

100 CIO Memos in, a reflection on how crypto is genuinely changing the world—and the recent column that broke my heart.

Editor’s note: This is the 100th edition of the Bitwise Weekly CIO Memo. To mark the occasion, I wanted to take a step back from the usual market commentary to share some big-picture reflections on the state of crypto today—and what some of its biggest critics continue to miss.

Do you remember the nine-dot puzzle?

It’s a classic visual riddle that makes the rounds at summer camps. The puzzle goes like this: How do you connect nine dots with only four lines, without ever lifting your pen?

It’s a test of (literally) thinking outside the box. There’s no way to connect the dots if you stay inside the square.

Draw outside its lines, however, and it’s easy.

I’ve been thinking about the nine-dot puzzle ever since I read Bloomberg opinion columnist Allison Schrager’s recent column on crypto.

Schrager is a great writer but a long-time crypto skeptic. For years, her columns predicted the demise of crypto, comparing it to tulip bulbs and other classic bubbles. More recently, she’s accepted that crypto is here to stay, but now she has a new critique: We don’t need it.

In her latest crypto column, “Bitcoin in Your 401(k)? That’s Not A Risk I Would Take,” Schrager dismisses bitcoin’s future, noting “government-issued money is pretty great.”

She shared a similar sentiment about stablecoins in her prior column: “The U.S. already has a means of payment—it’s called the dollar—and it works pretty well.”

These columns make me sad. “Pretty great” and “pretty well”?

Schrager is stuck between the lines. She can’t imagine a better way.

There Is a Better Way

The reality is: Our financial system is actually not that great.

Today, the average interest rate on a checking account is 0.07%. So-called “savings accounts” yield 0.38%. Checks clear in five days. Stocks settle T+1 (and not on weekends, as we pointed out in an ad campaign last year). Visa takes 1-3 business days to pay merchants while maintaining 80% gross margins. Our government backstops a handful of banks with implicit guarantees and bails them out periodically with taxpayer money. Meanwhile, the value of the U.S. dollar has fallen ~80% in my lifetime.

Purchasing Power of the U.S. Dollar, 1900-2020

Source: Statista

“Pretty great”?

One of the biggest reasons I work in crypto is because I know we can do better.

We can live in a world where payments are instant, fees are virtually zero, and the government won’t inflate your money away.

We can live in a world where you can earn real yield on your assets—yield that accumulates second by second, day by day, instead of periodically at the whim of service providers.

We can live in a world that’s 24/7 and global, where we’re not charged currency exchange fees or interbank transfer fees when we travel.

It’s wild to me just how readily we accept the status quo. Imagine if your email shut down at 4pm on Friday and didn’t turn back on until 9:30am Monday morning. That’s actually what happens with our brokerage accounts. More blissful, perhaps, but it’s no way to run an economy.

When I run into TradFi apologists, I want to show them how fast (almost instant) and cheap ($0.002) it is to send money over Base. I want to have them lend an asset on Aave and see interest accrue every second. I want them to move money between accounts at 7pm on a Saturday because, hey, it’s your money. And of course, I want to show them a chart of bitcoin, which looks like the inverse of the dollar purchasing power chart I showed above.

Price of Bitcoin, 2009-Present

Source: Bitwise Asset Management. Data from July 17, 2010 to July 28, 2025.

I know what the critics like Allison will say: Where’s the real-world use? If crypto is so great, why aren’t I using it to buy my groceries yet?

The answer is that, like many new technologies, crypto is not yet perfect. It needs a lot of work—from technologists, investors, regulators, and lawmakers—to achieve its full potential. And so, like most new technologies, initial adoption is taking place on the edges, places where the existing systems are particularly bad.

But if you train your eyes outside the box, you can see a better/faster/cheaper/more global financial world starting to appear.

You can see it in firms like Yellowcard, which helps sub-Saharan African businesses conduct cross-border transactions using stablecoins, avoiding a hugely inefficient banking sector. You can see it in Stripe’s $1.1 billion acquisition of Bridge, a stablecoin service provider that helps firms like Starlink invoice customers around the world. You can see it every weekend, when macro traders turn to crypto because stock markets are closed. And you can see it in folks like Ray Dalio reluctantly buying bitcoin because he is worried about the outlook for the dollar.

This is always the way with new technologies. The first cell phones were the size of a suitcase and had huge doubters, but they were hugely useful for a small set of politicians and CEOs. The first digital cameras had terrible resolution and “would never work,” but they gave NASA a way to send images from space and journalists a way to file stories without processing film. Over time, the technologies got better and better. Today, we can’t imagine a world without them.

I expect it will be the same with crypto. Already, in the right circumstances the technology moves money and financial goods better, faster, and cheaper than legacy systems. As regulations evolve and the user experience improves, I think we’ll see all financial goods migrate to crypto rails.

That would be a massive boost to the world. And a critical reminder that we don’t have to be satisfied with the status quo. Things can be much, much better.

And I’m as convinced as ever that crypto is what gets us there.

Risks and Important Information

No Advice on Investment; Risk of Loss: Prior to making any investment decision, each investor must undertake its own independent examination and investigation, including the merits and risks involved in an investment, and must base its investment decision—including a determination whether the investment would be a suitable investment for the investor—on such examination and investigation.

Crypto assets are digital representations of value that function as a medium of exchange, a unit of account, or a store of value, but they do not have legal tender status. Crypto assets are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not currently backed nor supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies, stocks, or bonds.

Trading in crypto assets comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks and risk of losing principal or all of your investment. In addition, crypto asset markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing.

Crypto asset trading requires knowledge of crypto asset markets. In attempting to profit through crypto asset trading, you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in substantial crypto asset trading. Crypto asset trading can lead to large and immediate financial losses. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price.

The opinions expressed represent an assessment of the market environment at a specific time and are not intended to be a forecast of future events, or a guarantee of future results, and are subject to further discussion, completion and amendment. The information herein is not intended to provide, and should not be relied upon for, accounting, legal or tax advice, or investment recommendations. You should consult your accounting, legal, tax or other advisors about the matters discussed herein.