The End of Bitcoin Maximalism
But that framing increasingly diverges from how Bitcoin is now being applied in practice.
Today, the crypto ecosystem is no longer a collection of isolated silos or, at least, it needn't be. Interoperability is the backbone of Web3. The same technologies that maximalists once dismissed, like wrapped bitcoin and cross-chain bridges, are now exposing the limitations of that worldview. While these technologies are far from perfect, they prove that users want more than ideological purity; they want utility and functionality. This evolution is particularly significant for Bitcoin, which has historically been limited by its transaction speeds and a lack of smart contract functionality.
The watershed moment came with the emergence and explosive growth of DeFi, offering yield farming, lending, and trading opportunities that Bitcoin — at least in its native form — couldn't directly participate in (most early DeFi activity was concentrated on Ethereum).
To bridge this gap, solutions like wrapped Bitcoin (WBTC) were conceived and launched, tokenizing BTC for use on Ethereum and other chains. While this was a step forward, wrapped tokens came with associated risks, such as centralized custodians, potential security vulnerabilities and an overall departure from Bitcoin's trustless ethos.
New systems, including trust-minimized tunneling and Bitcoin-anchored consensus proofs, are enabling BTC to be integrated into smart contract environments without compromising its core properties. These architectures avoid the need for wrapping. Instead, they treat Bitcoin as a foundational, external settlement layer that can interact directly with the rest of the blockchain ecosystem — through tunneling and specialized Bitcoin-aware virtual machines.
The result is simple: Bitcoin is no longer isolated. And it no longer needs to be.
Bitcoin maximalism asserts that BTC alone is sufficient. But the infrastructure now being deployed across the ecosystem proves otherwise. BTC is being used in DeFi. BTC is supporting NFT standards. BTC is moving across chains. And it is doing so without compromising its consensus layer or monetary properties.
The future of crypto belongs to collaboration, not isolation. Blockchain infrastructure will be shaped by interoperability and modular design. Bitcoin need not compete for dominance in such an ecosystem; rather, it can complement and secure a broader multi-chain ecosystem. As developers build bridges between chains rather than walls, they prove that Bitcoin can coexist with other networks, enhancing its utility instead of competing for dominance. In this environment, the maximalist mentality of 'one coin to rule them all' already feels out of touch.
Regular crypto users want flexibility and different options to stake, lend, or trade their assets across multiple platforms, which interoperability enables — unlike Bitcoin maximalism that restricts all out-of-the-box use cases. As multi-chain ecosystems mature, users are increasingly drawn to infrastructure that supports cross-chain utility, including secure integrations of BTC.
Finally, Bitcoin maximalism has always been rooted mostly in ideology — but the crypto industry is driven by innovation, and new technologies are proving that BTC can evolve without losing its importance or advantages. This way, maximalists risk being left behind if they dismiss these advancements as mere 'distractions.'
Bitcoin continues to serve as the most secure and censorship-resistant settlement network in the world. That is not changing. What is changing is the environment around it. Decentralized systems are growing more interoperable. The expectation that networks will remain isolated is no longer viable.
BTC is becoming a core layer in a multi-chain stack, and more integrated into systems it once stood apart from.
Where once Bitcoin maximalism offered clarity during crypto's early phases of growth, the ecosystem has evolved. Today, Bitcoin can serve as a cornerstone in a broader system emphasizing security, interconnectivity, and composability.
As this trend continues to gain momentum, Bitcoin maximalism may fade because the idea that one coin must dominate all others ignores the power of collaboration and innovation. Interoperability isn't a threat to Bitcoin — it's a catalyst for growth. The future of crypto isn't about choosing a single winner but rather about building a decentralized world where every chain, including Bitcoin, plays a vital role.
The decentralized future will rely on systems that are secure, interoperable, and modular. Bitcoin's role as a resilient base layer ensures that it will persist as an integral component of that future, not as the only chain, but a fundamental cornerstone among others.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
4 minutes ago
- CNBC
A major historical bitcoin cycle that dictates its price might be breaking
Bitcoin's historical "cycle" is showing signs that it might be breaking as a changing profile of investors and supportive regulation reshapes market dynamics. If this often predictable pattern is broken, it would have significant implications for the way investors assess the cryptocurrency's price action and the potential timing of when to invest in bitcoin. "It's not officially over until we see positive returns in 2026. But I think we will, so let's say this: I think the 4-year cycle is over," Matthew Hougan, chief investment officer at Bitwise Asset Management, told CNBC. Generally, the bitcoin cycle refers to a four year pattern of price movement that revolves around a key event known as the halving, a change to mining rewards that is written in bitcoin's code. The halving happens roughly every four years, with the last one taking place in April 2024 and the one prior to that was in May 2020. When the halving occurs, the rewards in the form of bitcoin that are given to so-called "miners" — entities that keep the bitcoin network functioning — are cut in half. This reduces the supply of bitcoin into the market. Therefore, there will only ever be 21 million bitcoin in existence. Typically, bitcoin would rally in the months after halving to eventually reach a fresh all-time high. Then bitcoin would crash, dropping roughly 70% to 80% from its peak leading to the onset of a "crypto winter," a prolonged period of depressed digital coin prices. The price of other cryptos would also fall dramatically in this period. Bitcoin would then trade within a range for a while, and as the next halving approaches, it generally sees its price appreciate. Then the cycle repeats. There was unprecedented market reaction around the last halving as Bitcoin hit a fresh all-time high of above $73,000 in March 2024, about a month before the halving, rather than reaching new heights after the celebrated event as expected. "In every previous cycle, new all-time highs came 12-18 months after the halving," Saksham Diwan, research analyst at CoinDesk Data, told CNBC. The main factor was the U.S. approval of bitcoin exchange-traded funds (ETFs) which began trading in January 2024. ETFs track the price movement of bitcoin without an investor actually having to own the cryptocurrency itself. Big inflows into ETFs, and the hope that this could bring more traditional institutional investors who had previously stayed away from crypto, helped boost the price of bitcoin. "This time, spot Bitcoin ETF demand essentially front-ran the typical post-halving price discovery. This was indeed the first clear indication that institutional flows could alter traditional cycle dynamics," Diwan said. The ETF was the first major factor that disrupted bitcoin's four-year rhythm. It brought in investors with deep pockets who were interested in holding the cryptocurrency longer term. But a number of other market factors have changed. Bitwise Asset Management's Hougan points to "blowups in crypto" that often preceded the crypto winters. He referenced the crash of so-called initial coin offerings (ICOs) in 2018 and the collapse of crypto exchange FTX in 2022. Meanwhile, the macroeconomic environment and regulation is becoming more supportive. "Interest rates are more likely to go down than up in the next year, and the fact that regulators and legislators are now willing to engage with crypto rather than steadfastly refusing to deal with it will dramatically reduce the risk of future blow-ups," Hougan said. Gary Gensler, the former leader of the U.S. Securities and Exchange Commission, had cracked down on the sector and opened a number of cases against crypto firms. Those in the industry said they were being unfairly targeted. Under the current administration of U.S. President Donald Trump, the SEC has dropped some cases against crypto firms. Washington has looked to introduce new laws around crypto and has even launched a bitcoin strategic reserve. Meanwhile, public companies are accumulating cryptocurrencies, especially bitcoin, as part of a new strategy. "With increasing market maturity, long-term holder accumulation at all-time highs, and dampened volatility, the traditional 4-year rhythm is being replaced by more liquidity-sensitive, macro-correlated behavior," Ryan Chow, co-founder of Solv Protocol, told CNBC. One key point to note is that historically the most significant price appreciation for bitcoin occurred between days 500 and 720 post-halving, according to Diwan of CoinDesk Data. Bitcoin peaked during this window in the 2016 and 2020 cycles, Diwan noted. "If this pattern was to repeat, then we should watch for potential acceleration between Q3 2025 and early Q1 2026," Diwan said, adding that "price action [in] this cycle has been notably subdued compared to previous post-halving periods." Bitwise Asset Management's Hougan said the four-year cycle is over, but for it to officially be dead, bitcoin would need to have a good 2026, which he expects will happen. "I don't think we've repealed volatility, but I think a) the forces that have historically created the four-year cycle are weaker than they were in the past and b) there are other very strong forces moving on a different timeline that I think will overwhelm our four-year tendency," Hougan said in an emailed comment. Bitcoin's latest record high was hit on July 14 as it pushed above $123,000. One prominent feature of previous cycles is that bitcoin would plunge roughly 70% to 80% from its record high following the halving. Crypto industry insiders told CNBC this won't happen anymore, given the reasons they've outlined to support a changing four-year cycle. "We believe the era of brutal 70–80% drawdowns is behind us," Solv Protocol's Chow said. He noted the largest correction this cycle has seen was around 26% on a closing basis compared to around 84% post-2017 and 77% post-2021 all-time highs. Long-term holders of bitcoin as well as "steady institutional inflows are contributing to greater downside absorption, Chow said. He added that there may be corrections in the range of 30% to 50% "in reaction to macro shocks or regulatory surprises, but they're likely to be shorter and less violent than in previous cycles." Hougan also said that 30% to 50% falls are possible but: "I bet 70% pullbacks are a thing of the past."
Fast Company
30 minutes ago
- Fast Company
The one part of crypto that's still in crypto winter
Crypto is booming again. Bitcoin is near record highs, Walmart and Amazon are reportedly exploring stablecoins, Robinhood is tokenizing shares of public and private companies, and NFTs—once left for dead—are stirring back to life. Even crypto-powered 'network states' are inching toward reality. But one star from the last bull run hasn't joined the rally: the metaverse. Back in 2020 and 2021, the metaverse was the tech industry's favorite toy —an immersive digital frontier where we'd work, play, and shop. Facebook rebranded to Meta, VR headsets flew off shelves, and internet searches for 'metaverse' jumped 7,200% in a single year. JPMorgan called it a $1 trillion opportunity that would 'likely infiltrate every sector.' Decentraland was among the breakout stars of the metaverse, a bustling virtual city with casinos, concerts, branded events from Dolce & Gabbana to Nestlé, and even a JPMorgan lounge.
Forbes
31 minutes ago
- Forbes
Is Bitcoin A Security Or Commodity?
Bitcoin is one of the most widely recognized digital assets in the world, but its legal classification remains a topic of continued debate. In the United States, the Commodity Futures Trading Commission (CFTC) has classified bitcoin as a commodity since 2015. As digital assets become more integrated into traditional finance, questions persist about whether bitcoin fits best within commodity or securities laws. This article explains the legal definitions of securities and commodities, outlines how U.S. and global regulators approach bitcoin, and explores the implications for investors, exchanges and policymakers. It also presents key arguments on both sides of the classification debate and discusses why bitcoin's regulatory status matters for its long-term role in financial markets. Why Bitcoin's Classification Matters Widely traded and globally recognized, bitcoin occupies a unique space in financial markets. Under the Commodity Exchange Act, it has been treated as a commodity since 2015, placing it within the legal framework that governs commodities trading. Still, as digital assets evolve and regulatory frameworks shift, questions persist. This article explores Bitcoin's current classification, the difference between securities and commodities and why the distinction matters for regulators, investors and institutions. Understanding Security Vs. Commodity Clarifying the difference between a security and a commodity is fundamental to understanding how digital assets like bitcoin are regulated. A security is typically defined as a financial instrument representing an investment of money in a common enterprise, with the expectation of profit primarily from the efforts of others. A commodity refers to a basic good or asset that can be bought, sold or traded and is generally interchangeable with other goods of the same type. This section outlines the legal definitions and regulatory implications of each classification. A security is a legal and financial instrument that represents ownership, debt or the right to participate in the profits or governance of an entity. It includes a broad range of assets such as stocks, bonds, options, derivatives and investment contracts. An asset does not need to be publicly traded to be considered a security. What matters is whether it involves an investment of money in a common enterprise with the expectation of profit from the efforts of others, as outlined in the Howey Test, a case decided by the Supreme Court in 1946. If an asset meets this definition, it falls under federal and state securities laws and is subject to oversight by the U.S. Securities and Exchange Commission, including disclosure and anti-fraud requirements. Goods such as oil, gold, wheat and natural gas are considered commodities. These are standardized resources that are uniform in quality and interchangeable, making them essential to global trade and investment. In the United States, commodity trading is regulated by the Commodity Exchange Act, a federal law enacted in 1936 that established the legal foundation for the CFTC. Because commodity prices are driven by supply and demand, they are a key component in portfolio diversification, risk management and broader economic activity. U.S. Regulatory Perspectives On Bitcoin Bitcoin occupies a unique position in the U.S. regulatory landscape, with different agencies applying distinct classifications based on their legal mandates. While the CFTC views bitcoin as a commodity, the SEC does not consider it a security. The Internal Revenue Service treats it as property for tax purposes. The following section outlines how each agency approaches bitcoin and what their classifications mean for investors and market participants. The CFTC classifies bitcoin as a commodity under the Commodity Exchange Act, giving the agency authority when bitcoin is used in derivatives contracts or when fraud or manipulation occurs in interstate commerce. The CFTC emphasizes that while virtual currencies can function as a medium of exchange or store of value, they present risks such as cybersecurity vulnerabilities, fraud and market speculation, especially in the absence of broader regulatory oversight. The SEC has stated that bitcoin is not a security, aligning with the CFTC's view. In 2025, under Chairman Paul S. Atkins, the SEC launched 'Project Crypto' to modernize securities regulations and better accommodate digital asset innovation. While the SEC maintains that some crypto assets may meet the legal definition of a security under the Howey Test, it has committed to developing clear guidelines to help market participants understand which assets fall under securities laws. The goal is to promote responsible capital formation, ensure investor protection and support domestic innovation without applying outdated rules to modern technologies. The Internal Revenue Service approaches bitcoin from a tax perspective. For federal tax purposes, bitcoin is treated as property rather than currency. This classification means that buying, selling or exchanging Bitcoin may result in taxable capital gains or losses, depending on how the asset's value has changed. Individuals and businesses are required to report these actions in compliance with property tax rules. The IRS treatment of bitcoin highlights the importance of accurate recordkeeping and reporting for anyone engaging in digital asset transactions. Global Regulatory Viewpoints Around the world, governments are taking diverse approaches to regulating bitcoin and the broader digital asset sector. In 2023, the European Union moved forward with the Markets in Crypto-Assets regulation, or MiCA, which sets clear requirements for transparency, supervision and consumer protection. In Asia, regulatory attitudes vary, with some countries embracing innovation and others tightening oversight in response to market volatility and geopolitical tensions. Meanwhile, jurisdictions like Australia have clarified that crypto assets, not specifically bitcoin, are not legal tender but are treated as taxable property, with gains and staking rewards subject to capital gains and income tax. Why Bitcoin Could Be Considered A Commodity Several core characteristics support the view that bitcoin functions as a commodity within financial markets. First, it operates without a central issuer, meaning no single entity controls its production, distribution or monetary policy. Second, bitcoin is widely viewed and used as a store of value, much like gold, particularly in times of economic uncertainty. Third, it is traded on commodity markets and futures exchanges, where its price is determined by market supply and demand rather than the actions of a company or issuer. Together, these features align bitcoin with traditional commodities and help explain why U.S. regulators, including the CFTC, have classified it as such. Arguments For Bitcoin Being A Security While U.S. regulators have classified bitcoin as a commodity, some authorities have raised concerns about whether it could meet the definition of a security. As former SEC Chair Gary Gensler has stated, within the realm of crypto, 'everything but bitcoin' could be considered a security, implying that bitcoin's decentralized structure might place it outside the typical Howey Test framework. Meanwhile, legal analysts and investor protection advocates have speculated that bitcoin-holder behavior, namely purchasing with the 'expectation of profits,' could align with key prongs of the Howey Test. Implications of Bitcoin Being a Commodity Bitcoin's classification as a commodity places it under the oversight of the CFTC, not the SEC. As a result, it is not subject to securities laws requiring issuer disclosures or registration. This affects how exchanges operate and reduces regulatory burdens compared to securities platforms. For investors, the designation allows access to regulated futures markets but provides fewer built-in protections than securities frameworks. Implications Of Bitcoin Being A Security If Bitcoin were to be classified as a security, it would fall under the jurisdiction of the SEC and become subject to federal securities laws. This would potentially introduce additional compliance requirements, such as registration and disclosure obligations for users involved in trading or facilitating transactions. Exchanges might need to adjust their operations to meet regulatory standards. Such a shift could lead to changes in market access, trading practices and investor participation. It may also influence how financial products involving bitcoin are structured and offered, with potential effects on liquidity, innovation and overall market dynamics. Expert Opinions And Market Sentiment Industry opinions on bitcoin's classification and value vary widely, reflecting the broader debate around its role in the financial system. After the SEC approved spot bitcoin ETFs in January 2024, ARK Invest CEO Cathie Wood criticized former SEC Chair Gary Gensler's dismissive tone, calling it 'par for the course' of the skepticism that often accompanies disruptive technologies. Others emphasize bitcoin's technological significance. 'Bitcoin is a remarkable cryptographic achievement, and the ability to create something that is not duplicable in the digital world has enormous value,' said Eric Schmidt, former CEO of Google. In contrast, JPMorgan Chase CEO Jamie Dimon has remained openly critical, stating, 'I personally think bitcoin is worthless.' These divergent views highlight the lack of consensus among financial leaders and underscore the importance of clear regulatory frameworks as bitcoin's role continues to develop. Bottom Line Bitcoin's legal identity plays a critical role in how it is regulated, traded and adopted within the financial system. It is currently treated as a commodity under U.S. law, supported by its decentralized design, use as a store of value and active trading on commodity markets. At the same time, its speculative appeal and investment-driven use continue to raise questions about whether some features align more closely with securities. Understanding the difference between securities and commodities helps clarify how the CFTC, SEC and IRS view bitcoin. As regulatory frameworks evolve, legal clarity will shape how bitcoin is taxed, accessed by investors and integrated into the broader economy. Ongoing policy developments will remain central to its future role in global markets. Frequently Asked Questions (FAQs) Is Bitcoin Legally A Commodity? Yes, the CFTC classified bitcoin as a commodity in 2015 under the Commodity Exchange Act. Has The SEC Ever Called Bitcoin A Security? No, the SEC has consistently stated that bitcoin is not a security. The SEC's position aligns with the CFTC's classification of bitcoin as a commodity. Does Bitcoin's Classification Change In Other Countries? Yes, bitcoin's classification varies by jurisdiction. Why Does The Classification Matter For Investors? Bitcoin's classification determines which regulations apply, affecting how it is traded, taxed and protected under the law. It also influences the level of oversight, investor protections, and access to financial products.
