Bitwise: How Crypto Assets Are Changing the World

Author: Matt Hougan, Chief Investment Officer of Bitwise; Compiled by: AIMan@Golden Finance

Do you still remember the 9 o'clock riddle?

This is a classic visual puzzle that often appears in summer camps. The puzzle is as follows: how to connect nine dots with four lines without lifting your pen?

This is a test that literally breaks the mold of thinking. If you remain confined to conventional thinking, you won't be able to connect all the dots.

However, it becomes very easy in its line drawing.

Since I read the recent column by Bloomberg columnist Allison Schrager (Allison Schrager) about cryptocurrency, I have been thinking about the nine-point puzzle.

Schlag is an excellent writer, but she has long been skeptical of cryptocurrency. For years, she has predicted the demise of cryptocurrency in her columns, comparing it to tulips and other classic bubbles. Recently, she admitted that cryptocurrency will continue to exist, but now she has a new criticism: we don't need it.

In her latest crypto column article "Does Your 401(k) Plan Have Bitcoin? I Won't Take That Risk," Schlag is dismissive of Bitcoin's future and points out that "government-issued currency is great."

She expressed a similar view in her previous column: "The United States already has a means of payment - it's called the dollar - and it works quite well."

These columns make me very sad. "Quite good" and "Quite nice"?

Schlag is in a dilemma. She can't think of a better way.

There is a better way

The reality is: our financial system is not actually that good.

Currently, the average interest rate for checking accounts is 0.07%. The so-called "savings account" yields 0.38%. Checks can be cashed in five days. Stock settlements use T+1 (instead of weekend settlements, as pointed out in our advertising campaign last year). Visa takes only 1-3 business days to pay merchants while maintaining an 80% gross margin. Our government supports a few banks through implicit guarantees and regularly rescues them with taxpayers' money. Meanwhile, during my lifetime, the value of the dollar has fallen by about 80%.

Purchasing Power of the Dollar, 1900-2020

Source: Statista

"Pretty awesome"?

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

We can live in a world where payments are instant, costs are almost zero, and the government does not deplete your money through inflation.

We can live in a world where you can earn real returns from assets—returns that accumulate every second, every day, rather than being accumulated periodically based on the whims of service providers.

We can live in a 24/7, globalized world where we don't have to pay currency exchange fees or interbank transfer fees when traveling.

I find it incredible that we so easily accept the status quo. Imagine if your email shut down at 4 PM on Friday and didn't come back until 9:30 AM on Monday. Our brokerage accounts are essentially like that. Perhaps a bit happier, but it's certainly not a way to manage the economy.

When I meet advocates of TradFi, I want to show them how fast (almost instantaneous) and cheap ($0.002) it is to transfer through Base. I want them to borrow an asset on Aave and see the interest accumulating every second. I want them to transfer between accounts at 7 PM on Saturday because, hey, it’s your money. Of course, I also want to show them a Bitcoin chart that looks like the inverse of the dollar purchasing power chart I showed above.

Bitcoin Price from 2009 to Present

Source: Bitwise Asset Management. The data range is from July 17, 2010, to July 28, 2025.

I know what critics like Allison would say: Where is the real-world use? If cryptocurrency is so good, why haven't I used it to buy things yet?

The answer is that, like many new technologies, cryptocurrencies are not perfect. They require significant effort from technologists, investors, regulators, and legislators to realize their full potential. Thus, like most new technologies, initial adoption occurs in the margins, particularly where existing systems are especially poor.

But if you break out of the conventional thinking patterns, you will find a better/faster/cheaper/more globalized financial world beginning to emerge.

You can see this in companies like Yellowcard, which helps businesses in Sub-Saharan Africa use stablecoins for cross-border transactions, thereby avoiding the inefficiencies of the banking sector. You can see this in the case of Stripe's acquisition of Bridge for $1.1 billion, which is a stablecoin service provider that helps companies like Starlink invoice global customers. You can see this every weekend, as the stock market is closed and macro traders turn to cryptocurrencies. You can also see this in people like Ray Dalio, who reluctantly bought Bitcoin due to concerns about the future of the dollar.

New technologies are always like this. The first batch of mobile phones was as big as a suitcase and faced a lot of skepticism, but they were very useful for a small number of politicians and CEOs. The resolution of the first digital cameras was poor, and they were "completely unusable," but they allowed NASA to send images from space and enabled reporters to write stories without having to process film. Over time, technology has become more advanced. Today, we cannot imagine a world without digital cameras.

I expect the same will happen in the cryptocurrency space. In suitable circumstances, this technology has already been able to transfer funds and financial products better, faster, and cheaper than traditional systems. With the evolution of regulatory frameworks and the improvement of user experience, I believe we will see all financial products migrate to the cryptocurrency track.

This will bring a significant boost to the world. At the same time, it reminds us that we should not be satisfied with the status quo. Things can get better.

I firmly believe that cryptographic technology can help us achieve this goal.