Bitwise CIO argues crypto offers more efficient financial system than TradFi

Bitwise Chief Investment Officer Matt Hougan argues that traditional finance (TradFi) apologists are misunderstanding the potential of cryptocurrencies, stablecoins, and the broader digital asset industry. He contends that these skeptics often compare crypto to historical bubbles like tulip mania, yet fail to acknowledge its capacity to deliver a more efficient financial system [1].

Hougan highlights that the current financial infrastructure is slow, expensive, and inefficient. For example, checking accounts yield only 0.07%, savings accounts 0.38%, and payment settlements often take days. He also points out how large financial institutions profit from these inefficiencies—such as Visa delaying merchant payouts—while government bailouts prop up the system. Over his lifetime, the U.S. dollar has lost roughly 80% of its purchasing power, according to Hougan [1].

He envisions a world where transactions are instant, fees are minimal, and the government does not devalue money through inflation. In this ideal financial system, asset yield would accumulate continuously, not at arbitrary intervals. It would operate 24/7, be globally accessible, and eliminate currency exchange and interbank fees when traveling [1].

Critics remain skeptical, asking where the real-world applications of crypto lie. Hougan responds that, like early mobile phones and digital cameras, crypto is still in its developmental phase and far from perfect. However, early adoption is occurring in areas where traditional systems fail—such as in Africa, where businesses use stablecoins to bypass inefficient banking systems, and in global transactions, where companies like Stripe have acquired stablecoin platforms to support international invoicing [1].

He also notes that traders are increasingly turning to crypto on weekends when traditional markets are closed, and even former skeptics like Ray Dalio have started investing in bitcoin due to concerns about the future of the dollar. These examples, Hougan argues, illustrate the emergence of a more efficient, global financial system.

Though challenges remain, Hougan believes that with improved regulation and usability, the majority of financial activity could eventually shift to the blockchain-based infrastructure. “We don’t have to be satisfied with the status quo,” he concludes. “Things can be much, much better. And I’m convinced as ever that crypto is what gets us there” [1].

Source: [1] Bitwise CIO says TradFi apologists miss the point on crypto — ‘there’s a better way’ (https://www.theblock.co/post/364841/bitwise-cio-tradfi-apologists-crypto)