Crypto Eats Wall Street: How Digital Assets Are Rewiring Finance

Forget IPOs—DeFi protocols now onboard users faster than Goldman Sachs hires MBAs. The ’crypto-ization’ of finance isn’t coming; it’s already bypassing legacy systems like a memecoin rug pull.

Traditional banks? Busy counting their 0.5% yield scraps while algorithmic stablecoins process $50B daily. The new financial infrastructure runs on blockchain rails—and it doesn’t ask for your 401(k) statement.

Here’s the kicker: When BlackRock starts shilling Bitcoin ETFs, you know the revolution got institutionalized. The suits always arrive late to the party—right after the early adopters moon.

Crypto pilled?

I’ve learned more about finance in my four years writing about crypto than I did in my 25 years working in finance.

When I was an equities trader and an analyst pitched me a stock idea, my first question wasn’t “Is this stock a security?”

Nor was it my last question — before crypto forced me to think about what makes something a security, I had never even heard of the Howey test.

Now I can recite all four prongs of Howey from memory.

(Yes, I’m available to liven up your next dinner party conversation, thanks for asking!) 

Nor had I given much thought to what makes something money before Bitcoin forced me to think about that, too.

It’s pretty intuitive: Money is whatever you use to pay for things (just being a store of value doesn’t qualify, sorry).

But how money is created turns out to be a DEEP mystery.

When the economist Richard Werner went to a one-branch bank where he could personally observe every step of the loan process in hopes of proving that banks create money “out of thin air,” he failed to identify the exact moment of creation.

Money, it turns out, is emergent, like consciousness.

I stumbled upon a similar mystery when trying to determine whether token holders own the protocols they believe they’re invested in. 

I’m still unsure on that one: Protocols are just software, so maybe they can’t be “owned” in the traditional sense — but if token holders can vote to change the software, maybe they can.

More intriguingly, though, asking that question has made me unsure whether shareholders own the companies they’re invested in.

Shareholders think of themselves as owners, of course, but the corporate law scholar Lynn Stout says they’re not (she convincingly argues that corporations own themselves).

Traditional investors may dismiss these questions as academic — the system works just fine for them, whatever its philosophical underpinnings.

But crypto might soon force them to start philosophizing.

Last week, Hester Peirce said the SEC is considering an exemption that would allow securities to trade on blockchains; and this week her colleague, Mark Uyeda, said that tokenization has “the potential to dramatically change how financial markets operate.”

If so, it might dramatically change how people think about financial markets, too.

It’s already happening, to some degree.

Matt Levine, for example, attributes the phenomenon of memestocks to the emergence of bitcoin, which “broke everyone’s brains” about why assets might have value.

More recently, The Economist’s Mike Bird speculated that retail investors may have been such enthusiastic buyers of the crash in equities because they’ve been influenced by the HODL culture of crypto.

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