Macroeconomist Fu Peng: Why Enter the Cryptocurrency Asset Industry

Author: Fu Peng, Chief Economist of New Fire Group

On April 23, Beijing time, at the Hong Kong Web3 Carnival held at the Hong Kong Convention and Exhibition Center, Fu Peng, who has recently taken office as Chief Economist of New Fire Group and is a well-known domestic macroeconomist, delivered his first public speech of 2026. In this speech, Fu Peng publicly explained his understanding of crypto assets and his interpretation of the current macroeconomic environment and the position of crypto assets within it.

Below is the full transcript of Fu Peng’s speech.

Many people have been asking me crazily these days, why I have become so close to the crypto and digital asset circles. Actually, this opportunity should be traced back to around 2022, so it’s been about four years now.

When I was in traditional finance, I was also closely monitoring and tracking the trends of the entire crypto asset market. Of course, today I am giving this speech mainly to tell a story from history, because for me, I am actually one of the main beneficiaries of the last era’s dividends. So some might think that my title is Economist, but in fact I am not a scholar. The core experience of my past 25 years is essentially in what everyone understands as traditional hedge funds.

You might want to ask, why are these traditional capital and financial sector people or funds starting to pay attention to it (crypto assets)?

Over the past year, I’ve been saying that the future will definitely be “FICC + C,” meaning a major asset allocation that includes crypto assets. Many will wonder why, so I’ll take this opportunity to briefly share with everyone. If you understand this, then you probably already have the answer to how the market works, how asset prices move, etc. So today I’ll help everyone break through that mental barrier.

This timeline should be traced back to the origin of the FICC asset class. When was that? Around the late 1970s to early 1980s. In fact, over the past decade, many of you here have become very aware that the entire global framework and pattern are undergoing huge changes, and this change is most similar to the period after World War II—specifically the 1970s and 1980s.

For example, I just saw that General Xiao Feng also mentioned artificial intelligence, and many guests have talked about AI integration. As a major technological advancement and productivity boost, each wave of technological progress and productivity improvement reshapes all industries. These industries include all kinds of business models, and of course, they will inevitably include finance. Our financial sector is not static, absolutely not.

Look at movies or TV shows like The Big Short or The Wolf of Wall Street, which depict finance as people in the trading floor shouting orders in vests, or at the NYSE, where many still think that finance is about quoting and trading on the trading floor. Of course, many journalists like to use this scene of on-floor trading as the background for their reports.

If you go to Chicago to see the earliest derivatives markets, or to the London Metal Exchange (LME), you will still see traces of this history. That’s right, those are the most traditional forms of finance, dating back to before the 1960s and 1970s. People in vests quoting prices, completing transactions with typewriters and punch cards. For Chinese speakers or most Chinese people, the impression of trading used to be in stock exchanges, watching the so-called ticker tape, filling out orders, sliding them into the counter, and then having a girl with a dedicated phone line execute the trades.

Not all finance or trading remains in that era. The biggest change in finance is definitely driven by technological progress.

So, in the last cycle of technological advancement, centered around semiconductors, computers, personal computers, DOS systems, Windows, etc., this technological progress reconstructed new forms of finance in the late 1970s and early 1980s. Today’s major asset trading—simply put—is a fusion of interest rates, commodities, exchange rates, stocks, and other financial assets.

The birth of FICC happened in the early 1980s. Around the 1970s, the pricing of financial derivatives—like options, the Black-Scholes model, and so on—was something you probably learned in school. But think about it: without the large-scale application and popularization of computers, how could you quote or price a financial derivative or asset in just ten, twenty, or thirty minutes? How could you complete quoting and trading?

Starting in 1985, all professional investors and institutional investors began using Bloomberg terminals. I started using Reuters 3000, then Reuters Xtra, and later Eikon, around 1997-98, during the Asian financial crisis. So, in other words, the era of computers, semiconductors, information technology, and data created the foundation for later FICC.

We now have asset classes, asset fusion, cross-asset trading, hedge funds, algorithmic trading, and well-known products like ETFs and derivatives. Without this technological progress, finance would still be stuck in the era where traders in vests shouted orders, and transactions were done manually.

JPMorgan on Wall Street became the leader in financial derivatives. They hired Cambridge graduate Blythe Masters, who became a key figure in establishing the derivatives market and transforming FICC into the most profitable part of Wall Street’s mainstream finance. Of course, this was also driven by the turbulence of the 1970s and 1980s. Remember, the origin of technological progress is also the origin of global upheaval.

Thus, technological progress at some stage coexists with upheavals in the world order. During the 70s and 80s, we experienced the Cold War, Middle East conflicts, the dollar’s oil crisis, and the surge in gold prices, along with systemic decoupling. But human civilization always advances amid opportunities and risks.

While the world order was chaotic, our computer, semiconductor, and information technology industries were rising. I used to joke that at that time, there was a strange investment portfolio—investing simultaneously in “the future of humanity” and “the end of humanity.”

Think about it: over the past decade or so, since around 2019, you can look at whether your assets are “the future of humanity” or “the end of humanity,” and see how they’ve performed today. Of course, today, as we all realize that AI, data, and computing power will become the most important productivity of the next era, the game is already more than halfway through.

The first half was what everyone traditionally thought of as the crypto circle. Why do I mention this? Because nothing is static; everything is constantly being reconstructed and reborn through development.

So I once said that it’s very possible that my entry into this circle might leave an important mark in history—like Blythe Masters’ entry into JPMorgan, which could mark a crucial turning point.

(This mark) signifies the end of the early development stage of the past 10 to 15 years, and the arrival of a new phase. In these two stages, investors, participants, market systems, and rules will undergo huge changes—or are already changing. As I mentioned in an interview earlier, many paradigms you’ve been familiar with over the past 10 or 15 years may undergo significant shifts. Of course, if you have long enough experience in traditional finance, you already know what’s coming. Just like in China’s past, where large provincial financial bureaus set up exchanges and a lot of financial assets existed. But as regulation and compliance strengthened, the market naturally weeded out the weaker players.

Financial derivatives gradually became part of financial institutions’ asset portfolios, and the same process is happening with crypto assets. Today, everyone is used to commodities, but before the 1980s, financial derivatives for commodities were not widespread, and most people couldn’t trade them meaningfully. Assets like copper, aluminum, lead, zinc, palm oil—these weren’t traded with derivatives back then; now they are. Similarly, currency exchange trading was not as convenient as it is today, and trading government bonds or interest rate futures was not possible then. This feels similar to 2009, when stock index futures, options, and derivatives started to emerge.

If you understand this, you realize it’s the same moment in time. The technological progress then drove the transformation and integration of traditional finance into FICC. Today, the same logic applies: data, computing power, AI, and underlying technologies—namely encryption and blockchain—are reconstructing finance with technology at the core.

We’ve been paying attention all along, but honestly, we haven’t participated much. I joke that early on, it was about faith, about fundamentalism, right? Believing in certain principles. But true capital doesn’t overly participate in faith-based speculation early on.

Crypto assets only become part of asset management frameworks after they grow and reach a certain level of certainty. For example, would large financial institutions have considered trading red beans or green beans as part of their asset allocation? Impossible. But today, we can turn copper into futures, options, ETFs, and include it in portfolios.

This shift reflects the evolving ecosystem of the crypto world. 2022 was the first time I truly engaged with some big players in this circle. The connection started in 2021, when I gave an interview and said that Bitcoin was around $70k. When asked about it, I was straightforward: based on our framework, we simply couldn’t understand what this asset really was.

Because all the faith-based narratives we don’t accept. We interpret it through our own lens, such as its function of value preservation.

In the interview, I said I believed we didn’t have enough time or weren’t at the right stage to get involved. But I said we were observing, and I admitted I hadn’t fully formed my understanding or model of it yet. However, I had a feeling—because at that time, the US CFTC had already classified it as a commodity, a tradable financial asset. For me, I could simply use this definition to understand its nature.

I also said, “I’m just guessing,” that if liquidity tightens significantly in 2022, then in our traditional asset circle, I could easily see valuation assets experiencing a large-scale devaluation. I said, “If my understanding is correct, it will lead to a valuation devaluation wave similar to that of other assets.” I guessed Bitcoin might drop by half. That’s why, at the end of 2022, when it fell to around $20k, many in the crypto circle contacted me, realizing that perhaps the era had changed.

Of course, after years of exchanges, I see that many of the true big players in the crypto circle are just like the big players in traditional finance back in the day. In the early days, everyone was rough and bold. Think about the big traders in China’s commodity futures markets—weren’t they all rough and ready to take risks? It’s about seizing opportunities. But those who can truly succeed in the future are the ones who recognize the turning points and adapt quickly.

If you rely on old experiences, you’ll be gradually phased out by the times. My personal view is that 2025-2026 might be the key period for crypto assets.

You can tell me what you think crypto assets are, and I will also absorb and integrate from a traditional finance perspective to deepen my understanding. I will also share how I interpret these assets through our logical framework. After several years of integration and acceptance, a new system has already formed.

And in recent years, including the end of last year, from our perspective, it’s about valuation compression caused by a new round of liquidity tightening. The crypto circle is experiencing the same story. What does this tell us? That we are on the right path. This process of inclusion and integration will eventually lead to a state where there’s no distinction—just like the stock traders and major asset managers depicted in The Wolf of Wall Street in the 70s and 80s.

So in the future, it will definitely be “FICC + C,” with no more sharp divisions between you and me. Of course, another crucial point for us is compliance. 2025 is a key year. Whether it’s the stablecoin legislation or the laws clarifying the legal status of digital and crypto assets, these two major laws have already given us the answer. In the future, you will see Wall Street financial institutions rapidly entering this market. Just like diversifying foreign exchange reserves, they will incorporate crypto assets into their diversified asset holdings.

Crypto assets will shift from being a single reserve or trading asset to a diversified trading asset. Back then, I could include commodities, exchange rates, and interest rates; today, I can include crypto assets. But remember, as they merge, the market logic will herald a new era, not the old habits. Also, after the 1980s, the proportion of retail investors in the US stock market gradually declined, while institutional participation increased. The same will happen in any market.

From early stages to maturity, this is an inevitable phase. Is this the case now? My answer is yes. Stablecoins have segmented blockchain payment functions, so think about what Bitcoin really is. A reporter just asked me if it’s “digital gold.” I said that’s somewhat controversial. Why?

Because it depends on the individual. For me, I might immediately understand what you’re trying to say. But for an ordinary investor, their first reaction might be “gold.” So what is gold? It’s a tradable commodity that maintains value—a complete definition. Some assets serve the function of value preservation, but they may not have the capacity for large-scale financialization or trading.

For example, what about your son’s AJ basketball shoes? Do they have value? Many people have a huge bias about value. For instance, do collectible figurines have value? Does a Richard Mille watch have value? The first point is, if it’s a broad concept of value, then it’s valid—emotional value, companionship value, all count. But whether it can be financiallyized or traded on a large scale, that’s another matter.

What about logs or walnuts? Are they valuable? Are orchids valuable? You might say no, but if you define value broadly, then you’re wrong. If you say they are valuable, but not tradable or financialized, then you’re also wrong. The full definition of an asset’s value is very important.

Crypto assets now have a very clear standard definition. The development of Western society follows a clear path: where there’s no prohibition, innovation is encouraged. Just like our financial derivatives in the past. When clients demand options or swaps, but the market or regulation doesn’t exist yet, we start first. Then, through compliance and layered regulation, it matures gradually. Western finance is about innovation, compliance, and maturity.

Crypto assets follow the same logic. Now, the key question is: by 2025, will financial regulation catch up, and will the certainty be clear? My answer is: yes. So in the future, you will see stablecoins applying blockchain technology for payments. What about Bitcoin? It will become an asset with value preservation and financialized trading functions—that’s its full significance. Of course, I know this definition might upset fundamentalists from the old era.

But I want to tell you, that’s just the reality of the times. It’s the logical framework. At this point, Wall Street can fully participate, and a new chapter is about to begin.

I don’t know if today’s speech will be recorded in history, but I hope it will. I hope it sparks some reflection. I believe this speech can also answer many questions people want to ask: Fu Peng, an old-timer in FICC, why venture into such a new industry? I want to say, your crypto assets have already matured enough to be included in investment portfolios.

That’s all I have to share. Thank you.